In this year’s congressional battle over the Credit Card Competition Act, detractors are gearing up for the bill to be attached as an amendment to the National Defense Authorization Act, again.
The Electronic Payments Coalition, which opposed the bill when it was first pitched in the prior congressional session, expects supporters will try that avenue again, a spokesman for the coalition said by email, even though it failed last time. A spokesperson for Illinois Democrat Sen. Dick Durbin, who has championed the bill, declined to comment.
Sponsors of the bill are intent on passing legislation reducing the domination of card networks Visa and Mastercard in the credit card processing arena and giving retailers and other merchants a break on the interchange fees imposed during the processing of credit transactions.
The legislation, Senate bill 1838, aims to accomplish those goals by pushing for more competition in the card network arena. Specifically, it would amend the Electronic Fund Transfer Act to that require that at least two unaffiliated networks be made available to merchants processing credit transactions. And at least one of the networks must not one of the two heavyweights in the industry. The requirement would affect card-issuing banks with assets of more than $100 billion and their partners.
The bill has attracted Republican support, with Sen. Roger Marshall (R-KS) and Sen. J.D. Vance (R-OH) backing the bill. In the House, Rep. Lance Gooden (R-TX) and Rep. Jeff Van Drew (R-NJ) support the bill. The legislation was introduced a year ago in the Senate, with a House companion introduced last month.
Supporters of the bill have argued there isn’t enough competition in the market, leading to billions of dollars in additional costs for merchants and consumers. The CCCA would mandate that merchants have access to card networks other than those controlled by Visa and Mastercard for routing credit card transactions.
Powerful interest groups have lined up on either side of the legislation this year, with retail and merchant industry groups, such as the National Retail Federation, arguing that businesses, and ultimately consumers, pay dearly for the interchange fees. Swipe fees were $22 billion higher in 2022 than a year earlier, according to the National Association of Convenience Stores, which backs the bill.
“There are a number of bills that might present opportunities” for attaching the CCCA as an amendment, said Doug Kantor, general counsel for the National Association of Convenience Stores. "Sen. Durbin has insight into all of that that we just don't have. We trust him and Sen. Marshall to figure out what makes the most sense.”
In a press release this week, the Merchants Payments Coalition argued that Visa and Mastercard control more than 80% of the market and fix swipe fees charged by banks while blocking transactions that could be processed over other networks.
Opponents, including the EPC as well as the American Bankers Association and National Association of Federally-Insured Credit Unions, contend that the bill would cut into Americans’ credit card rewards and reduce the availability of credit. They also argue that it has no place being attached to the NDAA.
“Not only is the CCCA not germane to the NDAA, it will seriously hurt consumers, community banks, and credit unions, including financial institutions that serve members of the military,” a pack of the groups said in a letter to Congress members this week.
The quarrelsome history of legislation directed at interchange fees reaches back more than a decade to Durbin’s crusade to pass his now-namesake amendment that curbed debit card fees. That Durbin amendment won passage after it was attached to the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.
Currently, the Senate CCCA bill, also with backing from Sen. Peter Welch (D-VT), has been referred to the Senate Committee on Banking, Housing, and Urban Affairs. As for the companion House bill 3881, it has attracted four cosponsors, three Republicans and one Democrat, and has been referred to the House Committee on Financial Services.
