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Credit union trade group officials said Senate sponsors of the Credit Card Competition Act have backed away, at least temporarily, from an effort to attach the controversial swipe-fee bill to a cryptocurrency measure, following intense lobbying from financial institutions.
America's Credit Unions (AmCU) and the Defense Credit Union Council (DCUC) had expected Sens. Roger Marshall (R-Kan.) and Dick Durbin (D-Ill.) to attempt to insert their interchange legislation into the Digital Commodities Consumer Protection Act during the Senate Agriculture Committee's Thursday markup. Marshall's amendment had been posted to the committee's website.
But following news that Marshall would no longer offer the amendment, AmCU President/CEO Scott Simpson credited coordinated advocacy by credit unions nationwide for halting the maneuver.
"America's Credit Unions, leagues and credit unions worked hard to keep Senator Marshall's credit card swipe fee amendment off of the Senate Agriculture Committee's crypto bill," Simpson said. "The Credit Card Competition Act is bad policy that would disrupt a secure and well-functioning credit card system in ways that hurt consumers and small financial institutions while delivering a windfall to the largest retailers in the country."
The bill would require large card issuers to route transactions over multiple payment networks, a change supporters said would lower interchange fees. Credit unions argued the mandate would weaken fraud protections, raise cybersecurity risks and reduce funding for consumer benefits, rewards programs and low-cost credit.
"Forcing routing mandates into the payments system increases fraud risk, weakens consumer protections, and ultimately limits access to affordable credit for millions of credit union members," Simpson said.
Although only Navy Federal Credit Union would be directly subject to the bill's requirements, AmCU said the impact would ripple across the industry. Simpson pointed to the unintended effects of the 2010 Durbin Amendment on debit interchange, which he said shifted costs and revenue losses onto credit unions.
"More than 3,700 direct messages in less than two weeks have been sent to members of Congress highlighting the consequences of this proposal," Simpson added.
DCUC Chief Advocacy Officer Jason Stverak previously warned that attaching the bill to unrelated legislation would bypass proper congressional review.
While trade groups considered the immediate threat reduced, they cautioned that efforts to revive the swipe-fee bill are likely to continue.
Contact Jim DuPlessis at Jim.DuPlessis@arc-network.com.
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