The leader of a national trade association representing credit unions is warning of a piece of legislation being pushed by both sides of the political aisle that could have a negative impact on credit card users, while giving giant retailers a break.
Scott Simpson, president and CEO of America’s Credit Unions, took to the stage in Washington, D.C. on Tuesday with Breitbart News economic editor John Carney to sound the alarm about the Credit Card Competition Act (CCCA).
Originally introduced by Sens. Dick Durbin (D-IL) and Roger Marshall (R-KS) with bipartisan support in 2022 before it was reintroduced to Congress in January of this year, the stated goal of the CCCA is to “increase competition in the credit card market and put an end to the Visa-Mastercard duopoly.”
Durbin is specifically known for his legislation that impacts finance and banking, with the infamous “Durbin amendment” being added last minute to the 2010 Dodd–Frank financial reform legislation to force the Federal Reserve to limit fees charged to retailers for debit card processing.
Now, Durbin and Marshall want to further limit major creditors by requiring banks with more than $100 billion in assets to offer merchants a choice of at least two networks over which a credit transaction can be processed, including one that is neither Mastercard nor Visa.
Under the current system, stores that take credit card payments get locked into whatever payment system that card runs on, and pays whatever fee that network charges. Visa and Mastercard run over 80 percent of the market.
While speaking with Carney on Tuesday, Simpson highlighted cybersecurity and consumer finance concerns that could come if the CCCA becomes law.
Calling it a “transfer of wealth to the retail oligarchs in this country,” Simpson explained that instead of passing savings from using cheaper payment systems along to their customers, big stores would just keep them for themselves.
“Credit unions represent soldiers, sailors, teachers, [and] first responders. That’s who’s going to be harmed,” the trade association president said. “We are going to be left with no other choice than to retreat, pull [our] product away from the kitchen tables of this country to continue to support big box retailers.”
Calling the 2010 Durbin amendment an “eleventh hour legislative stunt,” Simpson stated that there is “no evidence that any of that savings have pushed to the consumer.”
In addition to potential financial harm to consumers, Simpson also argued that retailers are forced to go with cheaper options for payment systems are more vulnerable to data breaches.
“A lot of people are worried about fraud and cybersecurity, and this could impact the ability of issuers to be able to, especially I think credit unions, but all issuers to be able to deal with fraud and cybersecurity,” Carney said.
Simpson replied, “Yeah, that’s what the interchange system is built for — is to establish contracts with the American consumers and reliable protection. Well, that protection comes at the expense of the issuer.”
“We look at the biggest data breaches in the history of our country and they tend to come from retailers because they don’t have incentives,” Simpson continued. “They’re not incentivized by the system to protect that data, and so it gives us zero confidence as issuers.”
Olivia Rondeau is a politics reporter for Breitbart News based in Washington, DC. Find her on X/Twitter and Instagram.
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