The American Consumer Institute has voiced its opposition to the Credit Card Competition Act, cautioning that it could eliminate credit card rewards without providing consumer savings. This announcement was made on the social media platform X.
According to Congress.gov, the Durbin-Marshall Credit Card Competition Act was introduced in the U.S. Senate in 2023 with the aim of promoting competition in the electronic credit transaction market. The bill mandates that covered credit card issuers must enable at least two unaffiliated networks for processing transactions, intending to reduce merchant fees. This proposal has sparked debate regarding its potential impact on credit rewards programs and consumer choice.
Oxford Economics projects that if the bill is passed, it could reduce U.S. GDP by $227 billion and result in 156,000 job losses over a three-year period. The study indicates that reduced rewards incentives would lead to decreased spending in sectors such as travel and tourism, with key destination markets potentially facing significant downturns.
The report further suggests that Orlando could see a $1.1 billion decline in consumer spending, while New York and Las Vegas might experience declines of $855 million and $785 million respectively. These figures highlight how vulnerable destination economies are to changes in consumer spending patterns influenced by rewards programs. Overall, the bill poses a risk of economic contraction in areas already sensitive to tourism fluctuations.
The American Consumer Institute is a nonprofit educational and research organization based in Washington, D.C., dedicated to promoting consumer welfare by enhancing public understanding of policy impacts. The institute conducts policy analyses, economic studies, and consumer surveys on various issues affecting U.S. consumers.