WASHINGTON–“Rumors are flying” in Washington that this will be the week the credit union-opposed Credit Card Competition Act will make its reappearance in Congress, according to one person.
Any legislation is expected to be largely similar to bills that were introduced in the prior House and Senate session, which would require that credit cards issued by the nation’s largest banks be able to be processed over at least two unaffiliated networks – Visa or Mastercard – plus a competing card network or one of several independent networks like Star, NYCE or Shazam. Merchants would then be allowed to choose which of the two networks to use, prompting networks to compete over fees, security and service.
One CU Would be Affected, But…
The previous measure, which has the strong backing of the nation’s retailers, would apply only to banks with $100 billion or more in assets and according to its proponents have no effect on local community banks or credit unions (only Navy FCU has assets of more than $100 billion).
Credit unions have been aggressively pushing back against the retailers’ claims, including saying the asset cap is meaningless and that all CUs will be affected. The legislation has been championed by Sens. Roger Marshall (R-KS) and Richard Durbin (D-IL).
‘Have Not Rested’
According to Jason Stverak, deputy chief advocacy officer for federal affairs with CUNA, the rumors have been strong on Capitol Hill that the legislation will again be introduced this week.
“This is why we have not rested and have to educate members and members’ offices of the negative impacts this type of legislation will have on all sizes of credit unions,” said Stverak.
Stverak added the concern is the bill will be tucked into the National Defense Authorization Act (NDAA) for 2023.
“This is not the proper vehicle for legislation,” said Stverak, “particularly when hasn’t even had a hearing.”
Others have also told CUToday.info they expect to see the bill re-introduced this week, most likely on Wednesday.
"For the retailer lobby, getting a bill introduced is definitely one of those 'good news, bad news' situations," said John McKechnie, who works as a Capitol Hill advocate for credit unions. "The good news is they have a formidable grassroots, political machine, and they know how to use it. The bad news for them is that they don't have an argument. In fact, there's over 10 years of data and facts showing that their interchange caps don't provide any consumer benefit. I think Congress will see that."
Hearings on the Hill
Meanwhile, Stverak said CUNA is monitoring the following hearings this week:
Today
House Committee on Financial Services: “Uncertain Debt Management: Treasury Markets & Financial Institutions
House Committee on Agriculture: The Future of Digital Assets: Providing Clarity for Digital Asset Spot Markets
House Committee on Oversight and Accountability: The Cascading Impacts of ESG Compliance
Wednesday
House Committee on Energy & Commerce: Blockchain and Web 3.0
Thursday
House Committee on Financial Services: “Dollar Dominance: Preserving the U.S. Dollar’s Status as the Global Reserve Currency”
Senate Committee on Commerce, Science & Transportation: Protecting Consumers from Junk Fees
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