Debit and Credit Card Interchange

Impact of the so-called Credit Card Competition Act

Some in Congress are proposing legislation that threatens the valuable benefits that consumers receive with their credit cards, like rewards programs and data protection. S.3623 and H.R.7035, the so-called Durbin Marshall Credit Card Competition Act (CCCA), would expand government-imposed routing mandates to the credit card market, which would negatively impact community banks and consumers alike. Concerningly, it could spell the end of card rewards programs that are supported by the banks and card networks that supply them. Debit card rewards went away when a similar law went into effect for those cards, and the same will happen for credit if the CCCA advances.

This misguided legislation will harm banks of ALL sizes and consumers. Community banks focus first and foremost on serving their community and their customers. For many community banks, one convenient option they provide to customers is credit card services. If routing mandates like the CCCA are imposed, community banks may lose the ability to support credit card offerings.

It could also expose credit cards to data security risks. The key component of this legislation is that it will empower the government to mandate which networks can be used for routing credit cards. Rather than allowing banks to choose networks based on security and soundness, they will be forced to use a network the government chooses. Banks and card companies work hard to ensure the networks they use are the most secure; cheaper, alternative networks being pushed by mega-retailers might not do the same.

Policymakers should oppose any attempts to double-down on the failed results of the Durbin Amendment or expand them onto credit card customers. Protect consumers and small community banks by voicing your urgent opposition to the so-called Credit Card Competition Act.