WASHINGTON—NAFCU and CUNA have joined with eight other financial services trade organizations in a joint letter to Congress that addresses what the groups say are the “detrimental impacts” the proposed Credit Card Competition Act will have on consumers, credit unions, and other financial institutions.
The legislation, which is strongly backed by retailers and merchants, was reintroduced last week and would extend the debit routing provisions of the 2010 Durbin Amendment to credit cards.
In the letter, the groups pointed to a recent report from the Government Accountability Office (GAO) that found the 2010 Durbin Amendment was “among the top five laws and regulations most cited…as having significantly affected the cost and availability of basic banking services.”
“Further, the merchant lobby’s promise that this regulation would result in savings for consumers never happened – the merchants pocketed the savings,” the trades wrote. “According to the Federal Reserve Bank of Richmond, after the Durbin Amendment was implemented, 98.8% of merchants failed to pass through savings realized from debit regulation to consumers, and over 20% increased prices.”
30% Decrease in Revenue
Though the bill limits these new requirements to only institutions over $100 billion in assets, the trade groups argued that under the Durbin Amendment, “community banks and credit unions still suffered a 30% decrease in their interchange revenue.”
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