WASHINGTON —A coalition of credit union and banking groups Thursday sent a joint letter to members of Congress strongly opposing the Credit Card Competition Act and any expansion of the Durbin amendment.
The group includes the Defense Credit Union Council, America's Credit Unions, American Bankers Association, Association of Military Banks of America, Bank Policy Institute, Consumer Bankers Association, Independent Community Bankers of America, Electronic Payments Coalition, Electronic Transactions Association, Mid-Size Bank Coalition of America and National Bankers Association.
The letter warns that government intervention in the U.S. credit card market would harm consumers, small businesses, and community-based financial institutions by reducing choice, increasing costs and fraud risks, and creating economic challenges for smaller institutions.
The letter highlights several key concerns:
- Small Businesses Benefit Both from Card Acceptance and as Card Users: Research shows the Durbin-Marshall bill would primarily benefit the largest retailers, leaving small businesses at a competitive disadvantage. Studies estimate that nearly all savings would accrue to merchants with over $500 million in annual sales, while small businesses could lose up to $1 billion in rewards and face reduced access to $700 billion in revolving credit lines.
- Community Banks and Credit Unions Would Be Harmed: Community-based financial institutions, which provide billions in loans and essential services, would be impaired by backdoor price controls on credit routing. Federal Reserve data confirms that similar measures under the Durbin amendment harmed exempted institutions, reducing revenue for lending and data security while increasing operational costs.
- Consumers Would Lose Choice, Security, and Rewards: The bill would diminish access to affordable credit, particularly for low-income consumers, and eliminate popular rewards programs. Studies show 77% of cardholders earning less than $50,000 rely on rewards cards. Evidence also indicates retailers are unlikely to pass savings to consumers, with 98% raising or maintaining prices after the original Durbin amendment.
The letter also underscores that the U.S. payments ecosystem is already highly competitive, offering numerous options from credit and debit cards to real-time payments and digital wallets.
“The payment card system is convenient, secure, and essential to the American economy,” the groups wrote. “The Durbin-Marshall bill jeopardizes consumer protections, rewards programs, and access to credit—all to benefit a handful of the largest merchants.”