DCUC Sends Letter to All Members of Congress Highlighting Ongoing Concerns with the Credit Card Competition Act
On May 16, 2024, the Defense Credit Union Council’s (DCUC) Chief Advocacy Officer Jason Stverak sent a letter to all Members of Congress expressing DCUC’s concerns with the Credit Card Competition Act (CCCA). The letter was sent ahead of next week’s National Grocers Association Congressional office visits to make sure that credit union industry concerns are part of the discussions.
Stverak’s letter emphasized that the main goal of the CCCA would force banks and credit unions to route credit card transactions to the cheapest network. While this would lower costs for retailers, their promises to pass on the savings to consumers have proven to not be true.
“We know big box retailers and e-commerce giants are making empty promises. According to a 2014 survey conducted by the Federal Reserve Bank of Richmond, there is a clear disconnect in what was promised during the 2010 Durbin Amendment versus what occurred. In fact, the survey highlights a sizable fraction of merchants who raised their prices or imposed restrictions on debit card use to avoid paying debit interchange fees.”
The letter also noted that using the cheapest network opens transactions up to fraud.
“If the Federal Government imposes price controls on interchange, credit card transactions will likely go over less secure, less reliable networks that do not provide a suite of rewards and protections for consumers. Instead, retailers will route transactions over the cheapest networks – many of which have underinvested in their platforms with little concern for security innovations or consumer benefits.”
Stverak highlighted the fact that these fees are already being passed on to our servicemembers, veterans, and their families at commissary stores and MWR facilities. Prioritizing cost over security for processing transactions would further harm this important segment of our country.
“Our nation’s defense credit unions understand that now more than ever we need to put our nation’s servicemembers first and reject the hollow call for new laws that would make basic financial services even more expensive for working-class Americans. We urge you to stand with us and stand up to the powerful interests pushing this by rejecting this legislation.”
Please see DCUC’s official letter for the full comments. To learn more about DCUC’s advocacy, visit www.DCUC.org/advocacy.