ARLINGTON, Va.–Among the pieces of legislation before Congress right now that is of greatest concern to credit unions is a new proposal that would affect credit union interchange, raising questions around its chances for passage and whether retailers’ claims the bill won’t affect CUs are actually accurate.
As CUToday.info reported, Sens. Richard Durbin (D-IL) and Roger Marshall (R-KS) have introduced the Credit Card Competition Act of 2022, which seeks to expand upon the original “Durbin Amendment” of a decade ago.
The new bill seeks to expand the interchange process by creating a new credit card routing mandate that “would be a direct detriment to credit unions and their members while lining the bottom lines of big-box retailers,” according to NAFCU.
Getting ‘Life’
NAFCU VP-Legislative Affairs Brad Thaler said he does not see a path forward for the bill, but that doesn’t mean it won’t become law.
“As we saw last time with the Durbin Amendment, with the rules of the Senate all it takes is an amendment on the Senate floor to be added to a piece of legislation and it can get life,” Thaler explained. “It's too late to move by regulator order. But with two senators behind it they can go to the floor and attach it to any bill on the Senate.”
The National Retail Federation has welcomed the bill, saying it would let retailers decide who processes credit card transactions and end practices that "block competition in the payments industry and drive up costs for retailers and consumers."
‘Exemptions Don’t Work’
Moreover, the retailers say the bill won’t affect any credit union under $100 billion in assets, as they would be exempted.
“The exemptions don’t work,” said Thaler. “The original Durbin Amendment was only supposed to be for financial institutions over $10 billion. But as study after study has sown, market forces have driven down the price for everybody. Credit unions under $10 billion have been severely affected. If they redo the systems over financial institutions over $100 billion, everybody will be impacted. It’s disingenuous and I think the authors know. They are just trying to fool people.”
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