A broad coalition of financial trade groups, including America’s Credit Unions, the American Bankers Association, and the Defense Credit Union Council, is urging Congress to reject the Credit Card Competition Act, warning that the proposal would harm consumers, small businesses, and community-based financial institutions.
In a joint letter sent this week to members of Congress, the organizations reiterated their strong opposition to the so-called Durbin-Marshall bill, which would impose new federal mandates on credit card transaction routing. The groups argue the legislation would expand government intervention in the credit card market, reducing consumer choice, increasing fraud risks, and undermining the ability of smaller banks and credit unions to offer affordable financial products.
According to the letter, small businesses would be among the hardest hit. Citing academic research, the coalition said most savings generated by the bill would flow to large retailers with more than $500 million in annual sales, while small merchants could lose up to $1 billion in rewards benefits and face reduced access to credit. The bill could also lead to $700 billion in lost revolving credit lines, limiting financing options for entrepreneurs.
Community banks and credit unions, the groups warned, would face backdoor price controls that weaken their ability to invest in data security, fraud prevention, and lending. Similar effects followed the original Durbin Amendment on debit cards, which, the coalition noted, reduced revenue for smaller institutions while boosting profits for major retailers.
Consumers would also suffer through diminished rewards programs, fewer low-cost accounts, and heightened fraud exposure, the groups said. Past experience shows merchants rarely pass interchange savings on to shoppers, undercutting claims that the bill would lower prices.
The coalition urged lawmakers to preserve a competitive, market-driven payments system that supports financial inclusion, security, and consumer choice.
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