What Experts Are Saying About the Durbin Interchange Bill…

Policy experts agree that proposed credit card routing mandates are bad for consumers, the travel and tourism industry, and small financial institutions.

Joel Griffith – Big box retailers pocketed free checking account perks – now they want your credit card rewards (The Heritage Foundation): “Don’t think for a second that the big box retailers will at least lower their prices in response to any reduction in processing costs. A similar situation occurred more than a decade ago when the Durbin Amendment regulation under Dodd-Frank limited debit card transaction fees. Most big retailers pocketed the savings—with only 22% lowering prices. Meanwhile, the price cap forced banks to recoup their revenue losses by adding fees and eliminating free checking for some lower-net-worth clients. This is crony capitalism at its worst.”

Casey Harrison – Legislation aimed at cutting credit card fees could adversely affect Las Vegas tourism (Las Vegas Sun): “Should the bill be signed into law, increased competition would likely drive down fees, giving credit card issuers less revenue to invest in services like rewards points and fraud prevention and cybersecurity for cardholders.”

Nic Diehl – Credit Card Competition Act will hurt airline and tourism (The Journal): “The Credit Card Competition Act is a piece of federal legislation that would establish alternate routing systems on credit card purchases. This would cost banks, including our small community banks and credit unions, billions of dollars in revenue. How does this impact the airports in this state you ask? If this bill is passed and banks lose this kind of revenue, they will be forced to cut back on credit card services to consumers. One of the biggest services that will be dramatically reduced is the credit card rewards points system.”

Bryan Bashur – The Detrimental Economic Impacts of the Credit Card Competition Act (Americans For Tax Reform) “The Credit Card Competition Act will increase costs on small businesses and consumers, reduce investment in payment security, and empower regulators such as the Federal Reserve…CCCA should be swiftly rejected by lawmakers. To do otherwise would be detrimental to American households, small businesses, and the competitive and secure credit card networks that consumers use every day.”

Devin O’Conner – Federal Bill Seeking to Alter Credit Card Fees Could Negatively Impact Casino Industry, Say Analysts (Casino.org): “Federal legislation seeking to overhaul the credit card checkout process at businesses across the country could significantly impact the casino and hospitality industries, so say financial analysts.”

Julie Wright – Federal government shouldn’t dictate credit card fees (Las Cruces Sun): “Small businesses  could end up paying more if the Credit Card Competition Act passes. Aside from the much higher average transaction amounts, credit card fees pay for the convenience of the global financial network which delivers payments into the businesses’ accounts immediately. No room is left for theft (either by employees, customers, or thieves) and no trips to the bank are necessary. And, don’t forget about the points and cash back for consumers and small businesses with cards. Americans can take vacations, earn cash back, and gain access to all manner of benefits through the strategic use of credit card points. These points are valuable (roughly $100 billion a year back to consumers and businesses) and are yet another way in which credit cards help businesses of all kinds expand their customer base and bring in more revenue. Access to credit and the smooth operation of the current system is one of the things that makes the American economy efficient. Putting the federal government in charge of the credit card industry is not going to improve our economy.”

Eric Cohen – Why the Credit Card Competition Act Falls Short (Digital Transactions): “Allowing merchants to choose their own network is a good idea in a perfect world. However, as it stands, the merchant isn’t likely to know which is right for them. Small businesses, which make up 99% of U.S. businesses, often do not have the time or the expertise to make the optimal choice. The best network for them might even be a major one. Visa, for example, recently reduced fees for small businesses and is more competitive than perceived. There is a major risk of increased fraud on smaller, cheaper networks. Let’s say a merchant picks a less expensive network with fewer protections, and fraud occurs. Who is financially responsible? If the merchant owns the cost, they could be spending more in the long run.”

Stephen Moore – Washington’s Nanny-State Credit Card Rules Will Only Hurt Consumers (Daily Caller): “Durbin’s bill would impose implicit price controls on credit cards by mandating that every Visa and Mastercard card also carry the logo of a cut-rate competitor’s network. This is like requiring McDonald’s to show its customers the Burger King and Wendy’s menu and prices. What’s demoralizing is that many Senate Republicans have signed on to this bill to regulate an industry that works for everyone. The credit card market isn’t broken; it’s flourishing as America moves rapidly to becoming a nation where nearly everyone has access to the convenience of cheap credit at their fingertips. The last thing consumers and sellers need is for Congress to ‘fix it.’”