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The payments landscape for community banks is changing rapidly as traditional payments converge with new instant payment systems and emerging cryptocurrencies. It is critical for Community Banks to maintain awareness of developments in the payments space to assess new opportunities, mitigate risks, and ensure that their payment strategy aligns with overall business plans.
June 12, 2023
ICBA and other groups called on congressional leaders to oppose newly reintroduced legislation to impose routing mandates on credit card transactions.
Bill Details: Introduced by Sens. Dick Durbin (D-Ill.), Roger Marshall (R-Kan.), J.D. Vance (R-Ohio), and Peter Welch (D-Vt.) and Reps. Lance Gooden (R-Texas) and Zoe Lofgren (D-Calif.), the Credit Card Competition Act (S. 1838/H.R. 3881) would require banks with more than $100 billion in assets to offer merchants at least two networks to process credit cards, at least one of which cannot be owned by Visa or Mastercard.
Letter to Congress: In a joint letter to House and Senate leaders, the groups said this legislation will harm consumers by reducing the number of credit card issuers competing for their business, removing the choice of their preferred card network, limiting popular credit card rewards programs, and weakening cybersecurity protections—solely to benefit big-box retailers.
ICBA Release: In a national news release this week, ICBA expressed its strong opposition and said applying routing mandates to credit card transactions would expand the Durbin Amendment’s government-orchestrated transfer of income from consumers to the nation’s largest retailers.
Background: ICBA has repeatedly campaigned against extending Durbin Amendment routing mandates to credit cards, with Congress last year keeping similar legislation out of its end-of-year omnibus spending bill following ICBA and community banker advocacy.
Public Opposition: ICBA polling conducted by Morning Consult last year indicates consumers oppose the policy change, with 61% of Americans saying consumers would not benefit from overhauling the card networks, including a bipartisan majority of Democrats (52%), independents (67%), and Republicans (65%).