Credit Union System Opposes Senate Interchange Bill

The Credit Card Competition Act introduced last week would impose a credit routing mandate.

The legislation calls for the Federal Reserve to draft regulations requiring that credit card-issuing banks with assets of over $100 billion offer a choice of at least two networks over which an electronic credit transaction may be processed. The bill is co-sponsored by Illinois Senator Dick Durbin who in 2010 introduced the Durbin Amendment, a provision of the Dodd-Frank Act, which set federal price caps on debit card interchange fees.

Credit Union Leagues and CUNA are concerned that changes in interchange fees on credit cards would lead to consumers losing out on security, benefits and savings as interchange fees cover the costs of fraud detection, credit monitoring, and fraudulent purchase protection.

The new bill would amend the 1978 Electronic Fund Transfer Act, which established consumer rights in electronic payments. Amendments would need to pass through the Senate Banking Committee, of which neither Senator Durbin nor bill co-sponsor Senator Roger Marshall is a member.

The Association will continue to monitor the bill and provide updates on any developments.