Senators Pivot Interchange Bill into National Defense Package

Credit card payment

The California and Nevada Credit Union Leagues continue keeping industry leaders informed of an attempt by a pair of U.S. senators to interrupt the credit card payments system. Recently, not only have those senators found colleagues in the House to introduce their bill, they are now trying to add their measure to a bill dealing with national defense.

The Leagues need YOUR help to stop this attempt. Credit union staff, volunteers, and members can tell Congress to leave the credit card interchange system alone and keep credit cards out of legislation dealing with national defense! Please send a message to your member of Congress through Connect For The Cause today.

Those senators are trying to attach the Credit Card Competition Act to the fiscal year 2023 National Defense Authorization Act (NDAA). S.4674 and H.R. 8874 (the joint legislation) would shift the interchange cost from big-box retailers to consumers. This cost is the price retailers pay for utilizing the payment card services that consumers use in their daily lives (credit card interchange). The bill, introduced by Sens. Dick Durbin (D-IL) and Roger Marshall (R-KS), would allow merchants to route payments through an unaffiliated network, bypassing established secure payment networks at the expense of consumers.

The bill’s authors know their legislation has little chance of passing and are attempting to hide their language in a package dealing with the U.S. Department of Defense. Nonetheless, if passed, this would be detrimental for consumers, and it now drags the U.S. military into this fight.

Routing mandates on credit cards would lead to less secure, less innovative, and higher-risk transactions. Consumers across the country rely on credit cards to make life happen, from paying for groceries and school supplies to covering emergency car repairs or medical expenses. Accepted nearly everywhere, credit cards offer robust security, fraud protection, and access to credit that may not otherwise be available.

These conveniences have a cost, and if retailers are successful, they will shift these costs from locally owned credit unions to pad their bottom lines. At a time when big retailers are reporting higher prices and profits, they are also coming for the benefits a member receives a credit union’s credit card.

Credit union advocates can help shift the tide on this issue, which is why the Leagues need YOUR support immediately.

(Read Economist Interchange Article Demonstrates Why CUs Have the Most to Lose for the latest background and context)

The Credit Union National Association (CUNA) and other organizations wrote in strong opposition to attaching the Credit Card Competition Act to the fiscal year 2023 National Defense Authorization Act (NDAA) in a letter to congressional leaders sent this past Tuesday. Marshall and Durbin attached the bill as an amendment to the NDAA, which CUNA, the leagues, other state credit union associations, and credit unions strongly oppose. The letter is undersigned by CUNA, the Defense Credit Union Council, the National Association of Federally-Insured Credit Unions (NAFCU), and several other banking associations and organizations.

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