The following content is sponsored by the Electronic Payments Coalition.
Hardworking Americans have been fighting record inflation for years, all while corporate mega-stores continue increasing their margins and making it harder for small businesses on Main Street to keep the lights on.
Now, these massive stores have recruited Sens. Dick Durbin (D-IL) and Roger Marshall (R-KS) to help them further pad their pockets by pushing for a new law that will hurt local community banks, credit unions, and your data security. Their new bill will detrimentally affect credit card services and rewards as we know them.
Under the Durbin-Marshall credit card bill, America’s leading credit card networks will be completely altered.
The new mandates Sens. Durbin and Marshall along with their corporate mega-store allies are calling for would cause credit cards to be routed through entirely new processing networks. These mandates would allow stores to cut costs and turn to a cheaper, untested network, increasing the risk of bad actors obtaining confidential consumer data – all to line the pockets of the Walmart and Targets of the world.
These changes would come at a significant systemic cost – a cost ultimately borne by consumers and the local financial institutions that serve them. Many credit unions and community banks would be forced to retreat from card issuance in response.
The harm doesn’t stop there. This bill would place sensitive consumer data in the hands of unknown and untrustworthy processing networks. As mega-stores have proven time and time again through infamous data breaches, they do not prioritize data security. Banks, on the other hand, care deeply and have invested greatly in the resources needed to effectively protect the data of their customers.
Essentially, these mega-store conglomerates want to reap the benefits of accepting credit cards but don’t want to be the ones paying for the actual service. This bill isn’t about encouraging competition to them – it’s about taking control.
Mega-stores and their allies have gone out of their way to spread false claims about what this bill really means for the American people. And this is certainly not the first time they’ve lied to us.
In 2010, mega-stores and their allies told the same lies, which led to Congress passing the Durbin Amendment. The Durbin Amendment instituted price controls on debit card fees that led to a ripple effect on the entire economy.
The Government Accountability Office (GAO) found the financial fallout from the Durbin Amendment resulted in an overall loss of debit rewards programs and free checking accounts, hitting lower-income Americans the hardest. A 2022 report from researchers at the University of Pennsylvania and Georgetown University showed the Durbin Amendment “led to higher checking account fees paid by consumers.” Despite these crippling consequences, mega-stores are at it again. This time around, we need Congress to listen to what the American consumer has to say.
More than 140 million Americans rely on credit unions, particularly those in small towns and rural communities. If Congress really wants to protect Americans and the institutions they rely on, they would actively oppose this bill.
So far, organizations representing community banks and credit unions across all 50 states have signed letters to Congress opposing the Durbin-Marshall credit card bill so that they can continue helping the American people.
It’s time for Congress to do the same. Consumers can’t keep paying the price.
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