WASHINGTON–CUNA said that “hundreds” of credit union leaders have already directly reached out to their members of Congress about the Credit Card Competition Act, even though only one credit union falls above the asset threshold included in the bill.
They’ve done so because that asset threshold--$100 billion—is a “red herring” aimed at dividing large institutions from small institutions, according to Jason Stverak, CUNA’ deputy chief advocacy officer for federal affairs.
As CUToday.info has reported, the legislation has been reintroduced in Congress after failing to pass the prior Congress and would require that cards from financial institutions with $100 billion or more in assets (Navy FCU is the only CU above that threshold) be enabled to be processed over at least two unaffiliated networks – Visa or Mastercard plus a competitor like NYCE, Star or Shazam, or even American Express or Discover.
The financial institution would decide which networks to enable, but merchants would then choose which to use on individual transactions, meaning networks would have to compete over fees, security and service, according to proponents of the bill. Supporters of the Credit Card Competition Act have said it would save merchants and their customers an estimated $11 billion a year.
The Credit Card Competition Act is strongly opposed by financial institutions, and equally strongly favored by retailers and merchants.
‘Misguided Legislation’
Stverak said CUNA and credit unions are responding vigorously to the “misguided legislation” because it will affect all credit unions, not just the largest.
“We saw this with Durbin (Amendment) on debit,” said Stverak. “(This) affects the entire payments ecosystems. It led to dramatic changes and cutbacks at the smallest of credit unions and the largest of credit unions. The hundred-billion-threshold is a red herring to divide the largest institutions from the smallest. It will put in place policies that will limit credit unions of all sizes. If credit unions can’t serve the members on the margin, then we will be failing in our mission. We saw that happen with Durbin on the and we know empirically that it will happen with (the Credit Card Competition Act) debit.”
Thousands of Messages
According to Stverak, in the 30 hours after the bill was reintroduced in Congress last week, credit unions sent more than 4,000 messages, emails and phone calls to members of Congress.
“We are making sure every office has the truth and the facts on this issue,” Stverak said. “We continually push back on some of the mistruths being pushed by the big box retailers on Capitol Hill.”
NAFCU Also Reports Strong Response
In addition, NAFCU VP-Legislative Affairs Brad Thaler said the trade group has seen a “very high” rate of response from its member credit unions. “It is something we are hearing a lot about from our members and they are weighing in,” said Thaler. “Folks are very upset about it and are asking what more they can do.”
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