Credit Union Chief Warns Bipartisan Credit Card Bill Would Favor Big Retailers Over Consumers

The president of a major credit union trade group is warning that a bipartisan bill in Congress aimed at breaking up the Visa-Mastercard duopoly could end up hurting consumers rather than helping them.

Scott Simpson, president and CEO of America’s Credit Unions, spoke Tuesday in Washington, D.C. with Breitbart News economic editor John Carney about the Credit Card Competition Act (CCCA), legislation first introduced in 2022 by Sens. Dick Durbin (D-IL) and Roger Marshall (R-KS) and reintroduced this January.

The bill’s stated goal is to increase competition in the credit card market by requiring banks with more than $100 billion in assets to give merchants a choice of at least two payment networks for processing credit transactions, with at least one alternative to Visa and Mastercard. Those two companies currently process more than 80 percent of credit card transactions in the country.

Durbin has a history of shaping financial regulation, having attached the so-called Durbin amendment to the 2010 Dodd-Frank financial reform law. That provision required the Federal Reserve to cap fees banks charge retailers for processing debit card transactions.

Concerns Over Who Benefits

Simpson argued that the new bill would repeat that pattern, allowing retailers to pocket savings from cheaper payment networks instead of passing them on to shoppers.

“Credit unions represent soldiers, sailors, teachers, [and] first responders. That’s who’s going to be harmed,” Simpson said. “We are going to be left with no other choice than to retreat, pull [our] product away from the kitchen tables of this country to continue to support big box retailers.”

He described the legislation as a “transfer of wealth to the retail oligarchs in this country” and pointed to the 2010 Durbin amendment as a cautionary example, calling it an “eleventh hour legislative stunt” that produced “no evidence that any of that savings have pushed to the consumer.”

Cybersecurity Concerns Raised

Simpson also raised concerns about data security, arguing that cheaper payment processing options used by retailers come with weaker consumer protections than those built into the existing interchange system.

Carney noted the fraud and cybersecurity risk directly, saying it could affect “the ability of issuers to be able to, especially I think credit unions, but all issuers to be able to deal with fraud and cybersecurity.”

“Yeah, that’s what the interchange system is built for — is to establish contracts with the American consumers and reliable protection. Well, that protection comes at the expense of the issuer,” Simpson replied.

He added that some of the largest data breaches in U.S. history have originated with retailers. “They don’t have incentives,” Simpson said. “They’re not incentivized by the system to protect that data, and so it gives us zero confidence as issuers.”