WASHINGTON – Although legislation to fund the federal government is grabbing much of the spotlight in D.C., proponents of the Credit Card Competition Act continue to look to do a little spotlight grabbing of their own.
Three senators who are backing the bill, which is strongly opposed by credit unions and financial institutions--Senate Majority Whip Dick Durbin (D-IL), Chair of the Senate Judiciary Committee, and Sens. Roger Marshall (R-KS) and Peter Welch (D-VT)--were joined by representatives from the Merchants Payments Coalition and small business owners in a press conference calling for passage of the legislation, which seeks to expand the card routing options available to merchants.
The senators have also threatened to slow down progress on all legislation until there is a vote on the bill, which is strongly supported by retailers and merchants.
‘Adding to the Problem’
“American consumers today are concerned about inflation and the high prices of groceries and gas. What they may not know is that the fees charged by Visa and Mastercard when they use their credit card, known as swipe fees, are adding to this problem,” said Durbin during the press conference. “Merchants have no choice but to accept the outrageous fees if they want to accept credit cards used by their customers. Our bipartisan legislation, which has the support from a wide range of small business owners, would inject real competition in the credit card market. It is long overdue for Congress to break up the sweetheart deal that Visa, Mastercard, and the big banks enjoy. We must bring the bipartisan Credit Card Competition Act to the floor for a vote.”
Small Business Owners Speak Out
Small business owners also spoke up against Visa and Mastercard and in favor of the bill during the press conference.
“As a small business owner, I feel the burden of these fees especially hard,” said Patti Riordan, owner of the Smoke Stack Hobby Shop in Lancaster, Ohio. “That’s because small businesses pay the highest swipe fee rates, have the fewest resources to navigate complex credit card contracts and have no leverage whatsoever to negotiate. The answer is competition, and that’s why I support Credit Card Competition Act.”
Credit Unions Respond
In response, CUNA President/CEO Jim Nussle issued a statement saying, “This bill hurts hard-working Americans, increasing profits for the largest merchants at the expense of consumers, who will be at greater risk. Credit unions are working tirelessly to fight back against this big box bailout bill for a simple reason: the current interchange system works.
“The system works for regular consumers and Main Street businesses, who depend on the safety and security of the credit card system to both purchase and sell items using a credit card. Having a credit card option increases business for retailers,” Nussle continued. “Credit unions use the small percentage of interchange generated by a purchase to improve options for consumers – data security, more fraud protection, and continued access to needed credit.”
League CEOs Speak Out
The leaders of several state leagues who are in Washington this week to Hike the Hill, also criticized the legislation, including:
- “The so-called credit card competition act will hurt Tennessee consumers and line the pockets of big box retailers. Tennessee credit unions serve their members each day and know that interchange works, and provides consumers with a quick, secure form of payment that has increased retail sales over the last few decades.” – Fred Robinson, president/CEO, Tennessee Credit Union League
- “Kentucky credit unions are on Capitol Hill as we speak, to make sure lawmakers hear directly from Kentucky credit union leaders about the incredibly damaging impacts that the Big Box Bailout efforts of Senators Durbin and Marshall would have on consumers - not only in our state, but nationwide. The data shows skyrocketing rates of fraud followed the Durbin amendment more than 10 years ago and Credit Union member-owners have borne the brunt of that burden. This bill would create an even greater financial burden and put their personal data at risk.” – Jim Kasch, President, Kentucky Credit Union League
- “Our message to Wisconsin's delegation was clear: the Credit Card Competition Act is a threat to credit unions' ability to invest in the financial well-being of members and communities. As not-for-profits, our credit unions return earnings - including those from interchange fees - to members.” – Brett Thompson, CEO, Wisconsin Credit Union League
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