WASHINGTON—New research commissioned by America’s Credit Unions and conducted by Cornerstone Advisors suggests the Credit Card Competition Act would disrupt the “safe, secure and well-functioning credit card system.”
The research was included in letter to Congress sent by the trade group, which opposes the legislation.
“If Congress passes this flawed interchange bill, there are six distinct consequences to American families and small businesses,” wrote America’s Credit Unions’ Greg Mesack and Jason Stverak. “All while helping the nation’s largest big box retailers make more profits off the people in your state and communities.”
Report’s Findings
According to the report, “Six Ways the Credit Card Competition Act Will Negatively Impact Consumers and Financial Institutions,” the legislation will:
- Limit consumers’ access to unsecured credit via safe financial institutions like credit unions, leaving more Americans financially vulnerable to alternatives like payday lenders
- Escalate annual fees on credit cards, creating barriers to credit access for people at all economic levels, including those who need access most to make ends meet
- Reduce fraud protections by fragmenting current fraud detection systems and increasing the cost for card issuers
- Exacerbate existing pressures on community institutions’ card programs as the cost of processing a card transaction currently exceeds interchange income
- Cut many merchants’ operating costs, without any requirements to pass on their savings to consumers
- Negatively impact the economy, as consumers spend less in the face of tighter credit card policies and lower credit limits
Videos Created
Glenn Grossman, who did the research for Cornerstone Advisors, is featured in both the short and long form videos released by America’s Credit Unions as part of its efforts, ACU said.
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