Associations Representing Banks and Credit Unions of All Sizes Call on Congress to Reject New Credit Card Mandates

Any legislative initiatives to expand the power of the federal government to intervene in the U.S. credit card market would harm small businesses and consumers across the country, the American Bankers Association, America’s Credit Unions, Bank Policy Institute, Consumer Bankers Association, Electronic Payments Coalition, Independent Community Bankers of America, Mid-Size Bank Coalition of America, and National Bankers Association told members of the Senate Judiciary Committee in a new letter sent to lawmakers today.

The letter, sent in advance of tomorrow’s Senate Judiciary Committee hearing on the subject, expressed the groups’ strong opposition to the Credit Card Competition Act (S. 1838 Durbin-Marshall bill) or any other expansion of the Durbin amendment. The groups also expressed their "deep disappointment" with the committee's decision to hold the hearing during the lame duck session of Congress and not invite testimony from a community bank or credit union harmed by the proposal. 

“The negative repercussions of the Durbin amendment are still being felt nearly 15 years after it was signed into law,” the groups wrote. “A 2022 report from the Government Accountability Office found that if the Durbin amendment ‘had not been implemented, 65 percent of noninterest checking accounts offered by covered banks would have been free.’ After the Durbin amendment went into effect, the Federal Reserve Bank of Richmond found 98 percent of merchants either raised prices or kept them the same—despite repeated promises any savings would be passed on to consumers through lower prices.”

The groups noted that imposing regulations on credit card interchange fees will lead to similar consumer harm, citing recent research that estimates the Durbin-Marshall bill (which would expand the routing requirements imposed by the Durbin amendment to credit cards issued in the U.S) would raise the cost of checking account services to consumers by $1.3 to $2 billion a year, with low-balance consumers bearing a disproportionate amount of those costs. They also noted the bill will “open the door to fraud, hamper rewards programs, and limit the allocation of credit to individuals and small businesses.”

The associations emphasized that these proposed mandates would impact every card-issuing financial institution in the country, even the community banks and credit unions its supporters claim are exempt.

“In reality, a change this monumental cannot be walled off by some legislative carve out,” they said. “As we saw with the original Durbin Amendment, interchange revenue for supposedly exempt institutions declined by 30 percent, which makes it more difficult for these community banks and credit unions to serve their customers. That is why it is so unfortunate the Committee did not allow one of these institutions to testify.”

The letter also highlighted survey data that makes it clear American consumers value their cards and oppose the federal government reaching into their wallets and emphasized that “the U.S. payments ecosystem is rife with competition.”

“Credit cards, debit cards, buy-now-pay later, checks, cash, ACH transactions, wire transfers, and real-time payment rails provide businesses and individuals with a multitude of payment options,” the associations wrote. “There is no evidence of significant concentration in the credit card market. In fact, the market for consumer cards concentration is far below the DOJ threshold and is far less concentrated than other industries.”

The associations urged lawmakers not to take actions to harm the “convenient, secure and hassle-free” payment card system that “protects consumers against fraud, guarantees businesses receive timely payments, funds reward programs like cashback and powers the American economy, from brick-and-mortar establishments to cutting edge e-commerce platforms 24 hours a day, seven days every week, and 365 days a year.”

“The Durbin-Marshall bill, and any other legislation that intervenes in the credit card market, puts all that in jeopardy,” the letter concluded.

Read the full letter.

About the American Bankers Association

The American Bankers Association is the voice of the nation’s $23.9 trillion banking industry, which is composed of small, regional and large banks that together employ approximately 2.1 million people, safeguard $18.8 trillion in deposits and extend $12.5 trillion in loans.

About America’s Credit Unions

America’s Credit Unions is the unified voice for not-for-profit credit unions and their more than 140 million members nationwide. America’s Credit Unions provides strong advocacy, resources and services to protect, empower and advance credit unions and the people and communities they serve. For more information about America’s Credit Unions, visit AmericasCreditUnions.org.

About Bank Policy Institute

The Bank Policy Institute is a nonpartisan public policy, research and advocacy group that represents universal banks, regional banks and the major foreign banks doing business in the United States. The Institute produces academic research and analysis on regulatory and monetary policy topics, analyzes and comments on proposed regulations, and represents the financial services industry with respect to cybersecurity, fraud and other information security issues.

About the Consumer Bankers Association

The Consumer Bankers Association represents America’s leading retail banks. We promote policies to create a stronger industry and economy. Established in 1919, CBA’s corporate member institutions account for 1.7 million jobs in America, extend roughly trillion in consumer loans and provide billion in small business loans annually. Follow us on Twitter @consumerbankers.

About the Electronic Payments Coalition

We are the credit unions, community banks, payment card networks, and institutions who support the backbone of our economic system: electronic payments. 

Click HERE to learn more.

About the Independent Community Bankers of America

The Independent Community Bankers of America® has one mission: to create and promote an environment where community banks flourish. We power the potential of the nation’s community banks through effective advocacy, education, and innovation.

As local and trusted sources of credit, America’s community banks leverage their relationship-based business model and innovative offerings to channel deposits into the neighborhoods they serve, creating jobs, fostering economic prosperity, and fueling their customers’ financial goals and dreams. For more information, visit ICBA’s website at icba.org.

About The Mid-Size Bank Coalition of America

Founded in 2010, the MBCA is a distinct and singularly focused "self-help" community for America's mid-size banks. The MBCA provides a forum to facilitate the utilization of information, market developments and best practices tailored toward mid-size banks. Our entrepreneurial culture also allows for consortium opportunities to share research and explore commercial ventures, resulting in a more resilient and competitive banking landscape that helps reduce the cost of banking services to consumers.

About the National Bankers Association

Founded in 1927, the National Bankers Association is the voice for the nation's Minority Depository Institutions (MDIs). No other trade association focuses solely on the priorities, federal advocacy, and representation of minority-owned and -operated banks. Members include Black, Hispanic, Asian, Pacific Islander, Native American, and women-owned and -operated banks. MDIs are located across 32 states and territories. For more information, visit nationalbankers.org.