President Donald Trump
Credit unions and banks have long maintained solidarity in their opposition to legislation to limit the swipe fees retailers pay them on credit card transactions.
The Credit Card Competition Act co-sponsored by Sens. Roger Marshall (R-Kan.) and Senator Dick Durbin (D-Ill.) seemed safely defanged with Republicans controlling all branches of government and consumer protections being cast aside by executive orders.
But a ding on Tuesday just after midnight signaled the bill had gotten wings: A post by President Donald Trump.
“Everyone should support great Republican Senator Roger Marshall’s Credit Card Competition Act, in order to stop the out of control Swipe Fee ripoff,” Trump posted on Truth Social.
That followed Trump’s Friday night post calling for a 10% limit on credit card interest rates starting Jan. 20 and extending one year. Banks and credit unions expressed their unhappiness and investors dinged credit card stocks on Monday.
Trump might run into court resistance to his setting of interest rates, and the actions would have to be carried out through a Consumer Financial Protection Bureau he has spent a year dismantling.
However, Trump’s prospects are brighter for a bipartisan piece of legislation on interchange fees that has been chewed over in Congress for years.
Bankers and credit unions expressed their displeasure over such a prospect Tuesday when Durbin and Marshall reintroduced the bill.
Scott Simpson, president/CEO of America’s Credit Unions, said the group continues to oppose the bill because it would put the payments system at greater risk of fraud to boost income for large retailers.
“The bill’s routing mandates will ultimately lead to increased fraud, reduced card rewards and limited access to affordable credit for millions of credit union members,” Simpson said. “There’s no evidence this proposal would lower prices for consumers, but there is evidence this will benefit the largest retailers in the United States.”
The Defense Credit Union Counsel and the American Bankers Association co-wrote a letter to congressional leaders Tuesday to stop the bill.
“It is rare for banks and credit unions to speak with one voice, but on this issue, we are united ... We urge you to reject this misguided legislation and prevent its inclusion in any must-pass bill," they wrote.
Granted, banks have opposed the federal credit union tax exemption and support anything that would help credit unions fit smoothly into the bathtub they are preparing for the movement’s future.
But on significant issues affecting consumers and finance, banks and credit unions have been in agreement — at least typically. The predecessor groups to America’s Credit Unions (AmCU) went as far as to pen a friend-of-the-court brief on behalf of payday lenders in a legal challenge to the CFPB that the U.S. Supreme Court dismissed in 2024.
The Durbin-Hawley bill would require card issuers to allow retailers to have their payments processed by a company other than Visa or Mastercard, which control about 80% of the business.
The bill is intended to lower the interchange fees merchants pay to banks and credit unions — typically 2% of a transaction. Because of asset limits, Navy Federal Credit Union would be the only credit union required to comply. However, AmCU has argued it would reduce an important source of non-interest income for all credit unions with credit cards.
Contact Jim DuPlessis at Jim.DuPlessis@arc-network.com.
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