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The big box interchange bill would have major negative impacts on credit unions, community banks, and the people they serve, Montana Reps. Steve Gunderson, R, and Ron Marshall, R, wrote in the Flathead Beacon this week.
"New regulations on interchange fees and routing mandates on credit card transactions coming in the form of the 2023 Credit Card Competition Act would have significant implications for our rural banks," they wrote. "We’ve seen this before. A similar set of regulations, known as the “Durbin amendment,” were imposed in 2010 related to debit card transactions. That legislation resulted in small banks having to raise fees on customers and cut back on services offered, for instance free checking."
The lawmakers cited numerous studies showing that the Durbin Amendment hurt community financial institutions and led to more an one million Americans, primarily in rural areas, losing bank accounts.
"Policies like the Durbin Amendment and the Credit Card Competition Act fail to consider the dire consequences for credit unions and community banks operating in rural areas. Reducing their interchange fee revenue deprives these institutions of a crucial source of income, leading to decreased services and increased fees for members. Moreover, it would undermine the financial stability of rural banks, potentially forcing some to close their doors and leaving our rural Montana communities in financial distress. We have seen this happen for the past decade, and it will only get worse if the Credit Card Competition Act passes."