WASHINGTON—The Defense Credit Union Council is gearing up once again for what seems like an annual fight on the Credit Card Competition Act (CCCA).
DCUC Chief Advocacy Officer Jason Stverak said DCUC has heard that the CCCA could be introduced this week.
“We're going to working with all of our trade associations in the financial services industry to make sure that members of Congress know there's united opposition to this bill, particularly as it impacts defense credit unions, limiting the resources they need to be able to serve active duty members of the military, their families and veterans,” Stverak said. “There are multiple issues that could be out there. We have Senator (Richard) Durbin's retirement. So, he may not be putting his full weight into this.
“It's kind of like Groundhog Day every three months,” continued Stverak, noting DCUC is paying attention to all of the threats to credit cards. “There is still a strong amount of support within the progressive wing of the Democratic party and the populist wing of the Republican party to move forward on this type of this type of legislation.”
As CUToday.info reported, what was once considered Donald Trump campaign rhetoric—a 10% cap on credit card interest rates—has now been proposed by Sens. Bernie Sanders (I-VT) and Josh Hawley (R-MO).
Stverak noted that President Trump expressed support for capping credit card interest rates at 10% while on the campaign trail.
“But we've not seen him make any comments about it since he's been in office,” he noted.
Letter To Members Of Congress
DCUC, America's Credit Unions and eight other financial trade organizations sent a letter Monday to members of Congress opposing the Credit Card Competition Act or any expansion of the Durbin amendment.
The coalition, which includes the American Bankers Association, the Association of Military Banks of America, Bank Policy Institute, Consumer Bankers Association, Independent Community Bankers of America, Electronic Payments Coalition, Mid-Size Bank Coalition of America, and National Bankers Association sent the letter stressing “any legislative initiatives to expand the power of the federal government to intervene in the U.S. credit card market” poses harm to consumers, small businesses, and financial institutions by reducing choices, increasing costs, and raising fraud risks.
“The Credit Card Competition Act is a misnomer—it does nothing to enhance competition and everything to consolidate power in the hands of the largest retailers at the expense of consumers, small businesses, and community financial institutions,” said Anthony Hernandez, DCUC president/CEO. “If Congress enacts this legislation, consumers will lose rewards programs they depend on, small businesses will face greater financial strain, and community banks and credit unions will struggle to provide essential services. This is a solution in search of a problem—one that will only create new ones.
”The organizations detailed key concerns, including:
- Impact on Small Businesses: A University of Miami study found the bill would mainly benefit large retailers, leaving small businesses at a disadvantage, reducing access to $700 billion in credit, and eliminating $1 billion in rewards.
- Harm to Community Banks & Credit Unions: These institutions play a critical role in local economies, but price controls on interchange fees would weaken their ability to lend and invest in security.
- Consumer Risks: The bill could reduce access to credit for low-income consumers, diminish rewards programs, and fail to pass savings on to consumers. Studies show that 88% of consumers value credit card rewards, and most would be disappointed to lose them.
- Existing Market Competition: The U.S. credit card market is already competitive, with various payment options available. Research shows financial institutions often operate at a loss on credit card transactions due to the costs of rewards programs.“The payment card system is convenient, secure, and hassle-free. It protects consumers against fraud, guarantees businesses receive timely payments, funds reward programs like cash back, and powers the American economy, from brick-and-mortar establishments to innovative e-commerce platforms 24 hours a day, seven days a week, 365 days a year. The Durbin-Marshall bill, and any other legislation that intervenes in the credit card market, puts all that in jeopardy,” the letter reads.
The organizations urged Congress to reject the Durbin-Marshall bill, warning that it would disrupt a system that ensures security, convenience, and financial access for millions of Americans. See more about DCUC’s position on this at dcuc.org.