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Credit Card Competition Act, Take Three

by David Klemt

Here we go again: Bipartisan lawmakers in the House and Senate are taking another shot at the Credit Card Competition Act.

After the incredibly underwhelming progress of the Credit Card Competition Act of 2022, lawmakers are making another move. Now, a bipartisan effort is coalescing around the Credit Card Competition Act of…2023.

The “new” bill was introduced on June 7. On the Senate side, Senators Dick Durbin (D-IL) and Roger Marshall (R-KS) are trying to push the bill forward. In the House, Representatives Lance Gooden (R-TX) and Zoe Lofgren (D-CA) are driving the effort.

Roughly eight months ago it was revealed that 1,802 merchants drafted, signed, and sent a letter to the House and Senate. To summarize quickly, the merchants were pushing for the bill to become law. Another supporter of the CCCA? The National Restaurant Association, claiming that the bill could save merchants $11 billion a year in fees.

Of course, a lot is going on since the introduction of the CCCA of 2022. For one, it’s being widely reported that House Republicans are “revolting,” blocking bills and effectively paralyzing the chamber. There’s also the matter of the second indictment of a former president.

However, reporters who know far more than I about the inner workings of Congress seem optimistic. While there’s drama in the lower chamber, there are articles circulating that seem to think the CCCA of 2023 has enough bipartisan support to pass.

What’s the CCCA Again?

The Credit Card Competition Act of 2023 addresses what the bipartisan lawmakers pushing the bill forward refer to as “the Visa-Mastercard duopoly.”

As I and other journalists have reported previously, Visa and MasterCard in the crosshairs of this bill because of their control over credit card markets. The Merchants Payments Coalition (MPC) said last year that Visa and MasterCard control about 576 million credit cards. That equates to nearly 90 percent of credit and debit cards.

Looking at just the US a couple of years back, people lit up their credit and debit cards for $3.49 trillion in transactions in 2021. In the US, in 2021, the $3.49 trillion in transactions meant Visa and MasterCard collected $77.48 billion in swipe fees.

To combat what some lawmakers are calling a duopoly, the CCCA of 2023:

requires credit cards issued by banks with more than $100 billion in assets to be routed through at least two unaffiliated networks;
requires that the above banks create competition and allow smaller companies to compete in credit-card processing by offering a non-dominant network choice, also known as “dual routing”;
and block networks that are “owned, operated, or sponsored by a foreign state entity” to strengthen national security.

A press release with a link to a one-pager can be found on Rep. Lofgren’s website here.

If you support the CCCA, you can let your lawmakers know by clicking this link.

Image: Avery Evans on Unsplash

Credit Card Competition Act, Take Two

by David Klemt

As we approach Election Day on November 8, it’s important to keep in mind that the Credit Card Competition Act of 2022 is still in play.

In fact, reports predict that another attempt to pass the bipartisan bill will take place in November. If reports are accurate, Senators Dick Durbin (D-IL) and Roger Marshall (R-KS) will try to include the bill in the National Defense Authorization Act (NDAA).

Now, that sentence and strategy may have you scratching your head. What, you may be asking yourself, do credit card fees have to do with defense spending?

Well, not much, truthfully. But you’re probably well aware that politicians will try to amend bills in bids to pass legislation they want. The common term for such a provision is “rider.”

It’s not difficult to understand why the Credit Card Competition Act has gone nowhere when we view Sens. Durbin and Marshall’s rider tactic.

Earlier this month, the senators attempted to include their bill within the NDAA. The reason is simple: the bill specifies the US Department of Defense’s (DoD) budget and expenditures each year. In other words, this is a “must-pass” bill.

However, Sens. Durbin and Marshall aren’t the only senators sponsoring bills. And they’re certainly not the only senators attempting to attach riders to the NDAA.

“It’s a bold strategy, Cotton.”

I will say, at least Sen. Durbin’s effort to attach the Credit Card Competition Act rider to the NDAA is somewhat related to the DoD.

You see, he and Sen. Marshall tried to tack on two amendments to push their bill through. The first amendment theorizes that veterans are being hurt by credit card fees. According to the senators, when military veterans make purchases at a military commissary, they are sometimes subjected to surcharges related to merchant interchange fees.

The second amendment brings the US Treasury Department and US Defense Department into the mix. This effort directs the departments to research just how much veterans are paying (annually, one would assume) in surcharges, and which companies these fees benefit. Then, the departments are to issue this report to Congress.

So, hey, points for attempting to make including the Credit Card Competition Act of 2022 relate to the NDAA for FY 2022. Of course, other senators are attempting to include their own riders. Should reporting prove accurate, some 900 amendments have been proposed. Supposedly, a few dozen might just make it.

This strategy didn’t work this month because the NDAA vote isn’t taking place in October. Instead, the plan is for the vote to take place sometime mid-November, when the US Senate reconvenes.

To learn more about the Credit Card Act of 2022, click here. If it’s a bill you support, let your elected officials know. Should you oppose the bill, let that be known to lawmakers as well.

Image: CardMapr.nl on Unsplash