DCUC Joins Financial Trades Letter Opposing Credit Card Competition Act, Citing Consumer and Business Risks

Anthony Hernandez

​Defense Credit Union Council (DCUC), alongside nine financial trade organizations, has reaffirmed its strong opposition to the Credit Card Competition Act (Durbin-Marshall bill) or any expansion of the Durbin amendment.

The coalition, including DCUC, the American Bankers Association, America’s Credit Unions, the Association of Military Banks of America, Bank Policy Institute, Consumer Bankers Association, Independent Community Bankers of America, Electronic Payments Coalition, Mid-Size Bank Coalition of America, and National Bankers Association sent a letter stressing “any legislative initiatives to expand the power of the federal government to intervene in the U.S. credit card market” poses harm to consumers, small businesses, and financial institutions by reducing choices, increasing costs, and raising fraud risks.

“The Credit Card Competition Act is a misnomer—it does nothing to enhance competition and everything to consolidate power in the hands of the largest retailers at the expense of consumers, small businesses, and community financial institutions,” says Anthony Hernandez, DCUC President/CEO. “If Congress enacts this legislation, consumers will lose rewards programs they depend on, small businesses will face greater financial strain, and community banks and credit unions will struggle to provide essential services. This is a solution in search of a problem—one that will only create new ones.”

The organizations detailed key concerns, including:

• Impact on Small Businesses: A University of Miami study found the bill would mainly benefit large retailers, leaving small businesses at a disadvantage, reducing access to $700 billion in credit, and eliminating $1 billion in rewards.

• Harm to Community Banks & Credit Unions: These institutions play a critical role in local economies, but price controls on interchange fees would weaken their ability to lend and invest in security.

• Consumer Risks: The bill could reduce access to credit for low-income consumers, diminish rewards programs, and fail to pass savings on to consumers. Studies show that 88% of consumers value credit card rewards, and most would be disappointed to lose them.

• Existing Market Competition: The U.S. credit card market is already competitive, with various payment options available. Research shows financial institutions often operate at a loss on credit card transactions due to the costs of rewards programs.

“The payment card system is convenient, secure, and hassle-free. It protects consumers against fraud, guarantees businesses receive timely payments, funds reward programs like cash back, and powers the American economy, from brick-and-mortar establishments to innovative e-commerce platforms 24 hours a day, seven days a week, 365 days a year. The Durbin-Marshall bill, and any other legislation that intervenes in the credit card market, puts all that in jeopardy,” the letter read.

The organizations urge Congress to reject the Durbin-Marshall bill, warning that it would disrupt a system that ensures security, convenience, and financial access for millions of Americans. See more about DCUC’s position on this at dcuc.org.

---