The IBA joined partner organizations from throughout the country urging congressional leaders to oppose passing “Durbin 2.0” during the end-of-year “lame duck” session of congress. The IBA-opposed legislation would expand the Durbin Amendment’s rate caps to credit cards and would impose routing mandates on credit card transactions. Read the letter.
Senators Roger Marshall (R-KS) and Dick Durbin (D-IL) have recently introduced S. 4674, legislation expanding government routing mandates to the credit card market.
Over ten years ago, the Durbin amendment imposed a price cap on interchange rates that financial institutions can receive on debit cards and mandated financial institutions offer at least two networks for routing debit card transactions. Rather than save consumers money as promised, merchants pocketed the savings they reaped from the government price cap. At the same time, community banks lost a revenue source to support important consumer benefits like free checking and debit rewards.
This new legislation would impose even more restrictions on credit card transactions. Rather than allowing banks to choose networks offering the best customer experience, security, and resiliency, they would be forced to choose among options set by the Federal Reserve. This means banks would be forced to do business with companies that may be less safe for consumers and unreliable.
This bill also would require banks to accept all transactions a merchant requests, forcing banks to reissue cards to meet new retailer demands. Community banks, which tend to have a lower volume of credit card transactions, may be forced to no longer offer credit cards. This government intervention would alter their options and negotiating power in private business decisions.
Write your lawmakers today! Urge them to oppose S. 4674, the Credit Card Competition Act. Also please consider sharing this request with your colleagues, so that we can speak up in significant numbers against the bill.