WASHINGTON–Ahead of meetings in Washington this week by the National Grocers Association, the Defense Credit Union Council has sent a letter to all members of Congress expressing what it said are its concerns with the Credit Card Competition Act (CCCA).
The letter, signed by DCUC Chief Advocacy Officer Jason Stverak, argues that while the main goal of the CCCA is to give retailers access to less-expensive transaction networks, which would lower their costs, “their promises to pass on the savings to consumers have proven to not be true.”
“We know big box retailers and e-commerce giants are making empty promises. According to a 2014 survey conducted by the Federal Reserve Bank of Richmond, there is a clear disconnect in what was promised during the 2010 Durbin Amendment versus what occurred,” the letter states. “In fact, the survey highlights a sizable fraction of merchants who raised their prices or imposed restrictions on debit card use to avoid paying debit interchange fees.”
DCUC said the move to less-expensive networks will likely also increase fraud.
“If the Federal Government imposes price controls on interchange, credit card transactions will likely go over less secure, less reliable networks that do not provide a suite of rewards and protections for consumers,” the letter states. “Instead, retailers will route transactions over the cheapest networks – many of which have underinvested in their platforms with little concern for security innovations or consumer benefits.”
Fees Hitting Servicemembers
Stverak further told Congress the fees are already being passed on to servicemembers, veterans, and their families at commissary stores and MWR facilities.
“Our nation’s defense credit unions understand that now more than ever we need to put our nation’s servicemembers first and reject the hollow call for new laws that would make basic financial services even more expensive for working-class Americans, the letter adds “We urge you to stand with us and stand up to the powerful interests pushing this by rejecting this legislation.”
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