Friday, November 15, 2024
Durbin, the Senate's second highest ranking Democrat, is said to have asked representatives of Mastercard and Visa, along with merchant, banking and consumer advocates, to speak at the hearing, although no specific groups or individuals have been named as yet.
Earlier this year, Sen. Durbin invited the CEOs of Visa and Mastercard, as well as the CEOs of American Airlines and United Airlines, to answer committee questions about the legislation, and the role airline rewards programs play in the cost of credit card interchange. But all four CEOs declined their invitations.
While the Democrats will soon cede control of the Senate, this may not be the last that is heard of legislative attempts at regulating the way credit card transactions get processed. The junior senator from Ohio and Vice President-elect J.D. Vance is one of three Senate Republicans who signed on as sponsors of the Credit Card Competition Act.
President-elect Donald Trump has not weighed in, publicly, on the legislation. However, on the campaign trail he did address the issuing side of the card business, promising that if elected he would cap credit card interest rates at 10 percent.
The Credit Card Competition Act would require large issuers of Visa and Mastercard credit cards (those with $100 billion, or more, in assets) to program those cards to support processing over at least two networks, only one of which could be owned by Mastercard or Visa. The legislation, which enjoys strong backing from the merchant community and has been panned by banking trade groups, enjoys bipartisan support in both houses of Congress.
Senator Roger Marshall, R-Kan., co-authored the legislation with Sen. Durbin, and Senator Josh Hawley, R-Mo., signed on as a co-sponsor earlier this year, along with Sen. Vance. Senators Jack Reed, D-R.I. and Peter Welch, D-Vt., round out the list of Senators sponsoring the legislation.
A companion bill of the same name, introduced in the U.S. House by Representatives by Zoe Lofgren, D-Calif., and Lance Gooden, R-Texas, also enjoys bipartisan support. Co-sponsors of the House bill include Representatives Tiffany Thomas, R-Wisc., Max Miller, R-Ohio, Van Drew, R-N.J., James McGovern, D-Mass., Chellie Pingree, D-Maine, and Bob Good (a Virginia Republican who lost a September primary race to retain his seat in the next Congress).
Groups representing merchants welcomed news of the hearing. In a press release issued by the Merchants Payments Coalition, Doug Kantor, general counsel at the National Association of Convenience Stores, said it will show lawmakers how "anticompetitive practices and a broken market" are causing interchange fees to "rise with negative impacts on their constituents."
The Independent Community Bankers Association put a different spin on the hearing, arguing that the legislation "would allow large merchants to route credit card transactions on the network that is least costly to them without regard to safeguarding consumer information." The ICBA has set up a special page on its website—a "grassroots action center"—that bankers can use to urge their lawmakers to oppose the legislation.
In January 2024, the American Bankers Association hosted Brian Kelly, also known as "the Points Guy," at a Washington summit where he discussed how consumers would be harmed by the legislation. "No matter how you slice it, this bill will not help consumers," Kelly said, according to reporting by the ABA Banking Journal. 
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