Financial Protection

We support bipartisan effort to hold credit card networks accountable

PIRG announced it is once again supporting a commonsense bipartisan bicameral bill that will indirectly protect U.S. consumers — and directly protect small businesses — from unfair credit card fees. In response to the anti-competitive practices of Visa and Mastercard that affect Americans of all demographics, in “red” and “blue” states alike, Sens. Dick Durbin (D-IL)  Roger Marshall (R-KS) Peter Welch (D-VT) and J.D. Vance (R-OH) are sponsoring the recently introduced Credit Card Competition Act. A House companion will have Lance Gooden (R., Texas) who co-sponsored the original bill, who is  joined by Democrat Rep. Zoe Lofgren of California. Others will be announced.

[joint release] WASHINGTON, DC — U.S. Representatives Zoe Lofgren (D-CA-18) and Lance Gooden (R-TX-05), along with U.S. Senators Dick Durbin (D-IL), Roger Marshall, M.D. (R-KS), Peter Welch (D-VT), and J.D. Vance (R-OH), today introduced the bipartisan, bicameral Credit Card Competition Act of 2023, legislation that would enhance competition and choice in the credit card network market which is currently dominated by the Visa-Mastercard duopoly. Building off of debit card competition reforms enacted by Congress in 2010, the bill would direct the Federal Reserve to ensure that giant credit card-issuing banks offer a choice of at least two networks over which an electronic credit transaction may be processed.

“Lawmakers Try Again to Curb Visa, Mastercard Fees, With Broader Support” (the Wall Street Journal WSJ ) explains: “Visa and Mastercard set and pocket network fees that merchants pay when consumers shop with cards. They also set interchange fees that merchants pay to the banks that issue credit cards.” These s0-called “swipe” fees are anti-competitive and raise the prices all consumers pay.

The Federal Reserve recently unveiled new debit card routing rules, allowing circumvention of Visa and Mastercard’s duopoly. The Credit Card Competition Act would direct the Federal Reserve to require that the largest credit card-issuing banks similarly offer a choice of at least two unaffiliated networks to process credit transactions, as well as debit transactions. These actions build on the original 2010 Durbin Amendment’s reforms of the debit card market.

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