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Ask Members of Congress to Oppose Credit Card Interchange Bill

Please oppose the Credit Card Competition Act through the California and Nevada Credit Union Leagues’ “Protect My Credit Card Info” campaign launched by our Connect for the Cause platform! This bill would severely impact credit unions and their members by changing the credit card interchange system.

Please send a pre-written letter TODAY to your two senators and member of Congress through our easy and convenient platform, urging them to stand up for local credit union members by opposing this legislation. The bill was introduced on the floors of the U.S. House and Senate on Wednesday.

The Leagues encourage you to share this campaign with your staff and board members. Additionally, here are some key facts to remember as you spread the word with employees, volunteers, and credit union advocates:

  • The interchange system works. Interchange fees are only a fraction of a cent per dollar transacted. However, these fees are key to protecting consumer information. Interchange fees help pay for fraud detection, replacing credit cards and reimbursing fraudulent purchases. Based on a survey from the Credit Union National Association (CUNA), 95 percent of respondents say the current interchange system works and 92 percent want personal information secured from data breaches.
  • The Credit Card Competition Act would hurt your credit union. This bill would force card issuers to offer credit cards that can be processed on multiple networks, not just Visa or MasterCard. The bill takes power away from card issuers, like credit unions, and puts it in the hands of retailers and merchants. Vendors would have the option to choose what network a credit card transaction is paid on. This makes it harder for credit unions to predict revenues from credit card interchange fees. It also means that if a merchant chooses to use a poorly secured credit card network and there’s a data breach, credit unions may be forced to take a loss.
  • The Durbin Amendment from 2010 is a broken promise. The amendment set a cap on debit card interchange fees. Since then, there has been a 34 percent reduction in debit interchange revenues among credit unions. The broken promise of the Durbin Amendment is that merchants would pass savings along to consumers. Nevertheless, a survey conducted shortly after the implementation of the Durbin Amendment revealed that only 1.2 percent of merchants actually reduced their costs.

Today, the Credit Card Competition Act threatens to change the interchange system — this time for credit cards. The Leagues do not want to see consumers and credit unions losing out to big retailers, so please make your voices heard!

“We don’t want history to repeat itself — and we need your credit union’s help to ensure it doesn’t,” said Diana Dykstra, president and CEO of the Leagues.

If you have any questions or issues, please email Leagues Senior Vice President of Federal Government Affairs Stephanie Cuevas. You can view the Credit Card Competition Act of 2023 Frequently Asked Questions (FAQ) sheet here, as well as the bill’s language here.

You can also read a report released by Cornerstone Advisors: The True Impact of Interchange Regulation: How Government Price Controls Increase Consumer Costs and Reduce Security.

Credit Card Interchange Bill’s Details & Specifics
The Credit Card Competition Act (CCCA) of 2023 is substantively identical to the CCCA of 2022, but with two notable changes:

  • The current CCCA adds that routing cannot be limited to two networks if any of the networks are included on the list of “designated national security risks” under Sub-paragraph D.
  • The current CCCA requires the list of “designated national security risks” to be updated every two years.

Under the current CCCA, the Federal Reserve would issue regulations requiring credit card issuers with more than $100 billion in assets to include at least two unaffiliated networks on which an electronic credit transaction can be processed. Additionally, the two networks cannot be the networks holding the two largest market shares of credit cards issued in the United States by licensed members of such networks (as determined by the Federal Reserve Board of Governors at the time the regulations are issued).

More information can be found on the cost of data breaches, how interchange fees protect consumers from data breaches, and the economic impact of amending interchange regulations by visiting the Interchange Works: Protect My Card site.

CUNA & Trades’ Joint Statement Opposing Credit Card Interchange Bill
Earlier this week, the Credit Union National Association (CUNA) and other trade associations representing the financial services industry released the following joint statement opposing legislation by Sens. Roger Marshall (R-KS) and Dick Durbin (D-IL) creating new credit card routing mandates that would eliminate funding for popular credit cards rewards programs, weaken cybersecurity protections, and reduce access to credit for those who need it the most:

Despite vigorous lobbying efforts from Walmart and Target, Congress chose not to take up the ‘Big-box Bill’ last year because it was deeply unpopular legislation — among both Democrats and Republicans. That has not stopped mega-retailers from pushing their allies in Congress to reintroduce harmful credit card routing mandates once again. This legislation hurts consumers by increasing costs, weakening payment security, harming financial institutions, reducing access to credit for those who need it the most, and ending popular credit card rewards programs.

At a time when fraud prevention, cybersecurity, and digital innovation are more critical than ever, this deeply flawed legislation will undermine the significant safeguards and security that exist today to protect credit card payments. Walmart and Target want Washington to mandate that financial institutions route credit transactions to the cheapest networks — many of which have underinvested in their platforms with little concern for security innovations — leaving the burden on consumers, small businesses, and financial institutions to clean up when things go wrong.

Consumers exercise their choice to pick their credit card in a free market based, in large part, on the trust, security, benefits, and protections that these cards offer. Consumers expect that their choice will be honored. Having the government take this choice away from consumers, and give it to big-box retailers, is fundamentally wrong. This is the ultimate bait and switch, placing the risk of fraud and associated costs on consumers, their families, and their financial institutions.

The US has the safest, most convenient, and most customer-friendly payment system in the world — and that’s because financial institutions, networks, and merchants each pay their fair share to maintain it. If the big-box retailers get their way, American consumers will lose the credit card rewards they’ve earned and rely on to help pay for family vacations or dinners with friends and to put some extra cash in their pockets to cover the cost of gas and groceries. We saw this happen once before when Senator Durbin slipped debit card regulations into the Dodd-Frank Act in 2010, leading to the elimination of popular debit card reward programs and many free checking products. Meanwhile, the big-box retailers broke their promise to lower prices.

The proposed legislation is a clear attempt to secure yet another financial windfall for the largest multinational retailers and e-commerce giants at the expense of the security of the payments ecosystem and reduced access to credit for American families with lower incomes. Consumers will pay the price, while many small issuers will be forced to exit the credit card business altogether. Senators Marshall and Durbin should not reengineer the entire payments system just to benefit Walmart and Target while causing smaller financial institutions and their customers to suffer.


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