WASHINGTON–The Credit Card Competition Act, which is strongly opposed by credit unions, has not been included in the National Defense Authorization Act for Fiscal Year 2023 (NDAA) after being advanced by the Senate.
The legislation, sponsored by Sens. Richard Durbin (D-IL) and Roger Marshall (R-KS), has been hotly contested on Capitol Hill, with the nation’s retailers supporting the bill just as strongly as credit unions have opposed it.
The Senate moved the legislation after returning to Washington just to focus on the bill, which authorizes approximately $847 billion for military and national security programs.
CUNA, state leagues, NAFCU, the Defense Credit Union Council (DCUC), and representatives of other groups have spent the last several weeks advocating against the Credit Card Competition Act, which would require that credit cards issued by the nation’s largest banks be able to be processed over at least two unaffiliated networks – Visa or Mastercard plus a competing card network or one of several independent networks like Star, NYCE or Shazam. Merchants would then be allowed to choose which of the two networks to use, prompting networks to compete over fees, security and service.
The bill remains before Congress, it just isn’t part of the much larger NDAA.
“Because of the tireless efforts of NAFCU, our member credit unions and our trade association coalition partners, we were able to keep the harmful Credit Card Competition Act and the interchange issue out of the Amendment in the Nature of a Substitute offered to the National Defense Authorization Act (NDAA) in the Senate (Tuesday),” said NAFCU President and CEO Dan Berger. “This is a big win for credit unions, but we need to continue the fight to make sure lawmakers fully comprehend the damage this bill would have on the financial services industry and American consumers. NAFCU pledges to keep fighting this issue on behalf of credit unions and consumers.”
CUNA Response
According to Jason Stverak, deputy chief advocacy officer with CUNA, there were approximately 950 proposed amendments that at one point could have been attached to the NDAA.
Stverak said CUNA and its affiliates have been active in opposing the bill.
“We have also been doing that in the districts, reminding members and staff about the negative impacts this legislation will have on credit unions and on the middle class and low-income people in the country as they deal with the ever-increasing impact of inflation on the family budget, their ability to afford rent and go to the grocery store,” he said.
DCUC Efforts
Ahead of the Senate's decision, DCUC sent two letters to Senate leaders advocating for the removal of the Credit Card Competition Act. Anthony Hernandez, DCUC president and CEO, stated the CCCA "imposes unnecessary and excessive regulations, and it lacks any additional savings benefits for servicemembers and veterans. The proposed bill includes many of the same empty promises made during the 2010 Durbin Amendment debates."
DCUC also shared with Senate leaders the Council's opposition to Amendment 6174, a proposed study on credit and debit card user fees imposed on veteran and caregivers at commissary stores and MWR facilities.
Hernandez stated the study "includes several privacy concerns which make obtaining the required data difficult and unsafe. This could potentially lead to operational security and readiness risks for our Nation’s military and DoD members."
Some Unknowns
Stverak said it’s not known when a full congressional vote on the bill will occur, other than it will happen after the midterm elections. He said there has been some discussion that there will not be a standalone NDAA to be voted on, and that there could be a third version of the bill being worked on in both the House and Senate behind the scenes.
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