Far from increasing credit card competition, the Marshall-Durbin-Gooden-Lofgren interchange bill would hurt consumers and small businesses while benefitting big box retailers, CUNA, the American Association of Credit Union Leagues, and all state Leagues and Associations wrote to House and Senate leaders Wednesday.
CUNA, Leagues, and credit unions strongly oppose the bill, and more than 20,000 messages of opposition have been sent to Capitol Hill as of Wednesday via CUNA and League action alerts.
“It would reduce the number of credit card issuers competing for consumers’ business, remove a consumer’s choice of preferred card network, wring out the competitive differences among card products, limit popular credit card rewards programs, and put the nation’s private-sector payments system under the micromanagement of the Federal Reserve Board.”
The letter notes the consequences of the Durbin Amendment mor than a decade ago, and warn this bill would be a costly repeat.
“The Durbin Amendment resulted in additional compliance burdens and related business costs to credit unions and banks, a reduction in interchange revenue from debit transactions, and a massive transfer of money to the largest retailers,” it reads. “Extending this failed policy to credit cards would be disastrous for consumers who rely on credit cards to make life happen, from paying for groceries and school supplies to covering emergency car repairs or medical expenses.
“Accepted nearly everywhere, credit cards offer robust security, fraud protection, and access to credit that may not otherwise be available. Interchange fees, which are only a fraction of a cent per dollar transacted, make this possible. Interchange keeps consumers, merchants, and financial institutions safe,” it adds.
The letter also notes: