Protect My Points: Oppose the Durbin-Marshall Credit Card Mandate

Some in Congress are proposing legislation that threatens the valuable benefits that consumers receive with their credit cards, like rewards programs. In fact, bill sponsors are trying to attach this so-called “Credit Card Competition Act (CCCA)” to unrelated legislation on the Senate Floor. CCCA would mandate that the government decide which networks banks can use to process credit card transactions.

This would threaten rewards programs that consumers value, make it costlier for smaller financial institutions to offer credit cards, and potentially expose consumer data to security risks.

It could spell the end of card rewards programs. When was the last time you booked a flight using rewards points? Or saved on gas? If you’re like millions of Americans, you probably take advantage of credit cards rewards. Those rewards are supported by the banks and card networks who supply them. This legislation could mean the end of those rewards, as the funding that enables those popular programs would be eliminated.  Debit card rewards went away when a similar law went into effect for those cards and the same will happen for credit if the Durbin-Marshall credit card mandate is passed.

It could limit community banks’ credit card offerings. The 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 for their customers.

It could expose credit cards to data security risks. The key component of this legislation is that it will allow the government to mandate which networks can be used for routing credit cards. Rather than allow 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 may not have the same priority.