Neil Walker, Managing Director of Macro Modelling and Scenarios at Oxford Economics, said that the Durbin-Marshall credit card bill could significantly harm local economies reliant on travel and hospitality. The statement was made on BusinessWire.
"The potential national impact of this bill is significant; however, the effects at the local level are even more pronounced," said Walker. "The data highlights the outsized impact this policy could have on areas dependent on travel and hospitality-driven revenues, which are especially vulnerable to shifts in rewards-driven consumer behavior."
According to Congress.gov, the Durbin-Marshall Credit Card Competition Act was introduced in the U.S. Senate in 2023 to promote competition in the electronic credit transaction market. The bill would require covered credit card issuers to enable at least two unaffiliated networks for processing credit card transactions, aiming to reduce merchant fees. It has sparked debate over its potential effects on credit rewards programs and consumer choice.
Oxford Economics projects that the bill could reduce U.S. GDP by $227 billion and result in 156,000 lost jobs over a three-year period if passed. The study found that reduced rewards incentives would lead to decreased spending in sectors like travel and tourism. Key destination markets could face significant downturns as a result.
According to the report from Oxford Economics, the bill could cause a $1.1 billion decline in consumer spending in Orlando alone, along with $855 million in New York and $785 million in Las Vegas. These losses reflect how vulnerable destination economies are to shifts in consumer spending patterns driven by rewards programs. Overall, the bill risks triggering economic contraction in already tourism-sensitive areas.
Walker is the Managing Director of the Macro Modelling and Scenarios team at Oxford Economics, where he leads economic scenario analysis for global corporate and financial clients. His research has included the economic effects of temperature volatility and regulatory stress scenarios for institutions like the Prudential Regulation Authority (PRA) and Hong Kong Monetary Authority (HKMA). He brings over a decade of experience in macroeconomic modeling and forecasting.