The Defense Credit Union Council (DCUC) and nine other financial trade organizations expressed their opposition to the Credit Card Competition Act, also known as the Durbin-Marshall bill. The coalition includes the American Bankers Association, America’s Credit Unions, the Association of Military Banks of America, Bank Policy Institute, Consumer Bankers Association, Independent Community Bankers of America, Electronic Payments Coalition, Mid-Size Bank Coalition of America, and National Bankers Association.
In a letter sent by these organizations, they emphasized that "any legislative initiatives to expand the power of the federal government to intervene in the U.S. credit card market" could negatively impact consumers, small businesses, and financial institutions by limiting choices and increasing costs.
Anthony Hernandez, DCUC President/CEO said: "The Credit Card Competition Act is a misnomer—it does nothing to enhance competition and everything to consolidate power in the hands of the largest retailers at the expense of consumers, small businesses, and community financial institutions."
The letter outlined several concerns:
- Impact on Small Businesses: A University of Miami study indicated that large retailers would benefit most from this bill while small businesses might lose access to $700 billion in credit and $1 billion in rewards.
- Harm to Community Banks & Credit Unions: Price controls on interchange fees could weaken these institutions' ability to lend and invest in security.
- Consumer Risks: The bill may reduce credit access for low-income consumers and diminish rewards programs. Studies show 88% of consumers value credit card rewards.
The letter also mentioned that "the payment card system is convenient, secure, and hassle-free," highlighting its role in protecting against fraud and supporting reward programs. The organizations urged Congress to reject the Durbin-Marshall bill due to potential disruptions it could cause.
For further details on this joint statement from financial trades opposing the bill, see their press release https://www.aba.com/about-us/press-room/press-releases/joint-letter-on-misguided-durbin-marshall-bill.
Information from this article can be found here.