Ginger Laurent | Baton Rouge Area Chamber
Ginger Laurent | Baton Rouge Area Chamber
The Louisiana Bankers Association {LBA} is one of fifty state banking associations to oppose the "Credit Card Competition Act."
That's according to a list of state financial organizations that signed on to 2024 Congressional letters opposing the legislation and released by the Electronic Payments Coalition.
The U.S. Senate sponsor of those regulations, U.S. Sen. Dick Durbin (R-Ill.) recently said he plans to re-introduce the legislation in the current congressional session, reported Payments Dive.
“If passed, this legislation could hurt all credit card issuers (including community banks) and their customers by allowing merchants to choose cheaper, less secure, card networks that would expose customers and their credit card data to weaker cybersecurity protections and increased fraud vulnerabilities,“ Ginger Laurent, CEO of the LBA, told Baton Rouge Reporter in January. “Merchants receive great benefits from the current payments system, including increased sales, faster transactions, reduced costs of cash, new retail channels, and prompt, guaranteed payments.“
Originally sponsored by Durbin and U.S. Sen. Roger Marshall (R-Kans.), the so-called Credit Card Competition Act would require banks to offer merchants at least two network options, one of which cannot be Visa or Mastercard, for processing credit card transactions.
Opponents of the bill argue that if given the choice, retailers would likely choose cheaper, less secure networks for processing transactions, thereby exposing consumers to increased securities and fraud risks.
Nationally, the bill could lead to a $227 billion loss in U.S. economic activity and 156,000 lost jobs, according to an analysis conducted for the Electronic Payments Coalition (EPC) by Oxford Economics Research (OER).
The bill applies to credit cards what a similar measure in 2010, often referred to as the “Durbin Amendment,” applied to debit cards. The 2010 measure was a requirement of the “Dodd–Frank Wall Street Reform and Consumer Protection Act.”
A 2014 George Mason University study found that the 2010 “Durbin Amendment” led to a 50% reduction in the number of “fee-free” accounts offered by banks between 2009 and 2013, and doubled average monthly fees on “non-free” current bank accounts.
The study also said the measure resulted in an increase of 1 million "unbanked" Americans in the year after the measure was enacted.
Which state banking associations oppose the “Credit Card Competition Act”?
Source: Electronic Payments Coalition
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