September 15, 2023

Berger to Senate: Reject the big box bailout bill


NAFCU President and CEO Dan Berger wrote to Senate Majority Leader Chuck Schumer, D-N.Y., and Senate Minority Leader Mitch McConnell, R-Ky., to reiterate NAFCU’s strong opposition to an amendment that would attach the Credit Card Competition Act (CCCA) to the Military Construction, Veterans Affairs, and Related Agencies Appropriations Act. Sen. Roger Marshall, R-Kan., has filed the CCCA as an amendment to the appropriations package and indicated he may hold up consideration of the appropriations measure to try to force a vote on the amendment.

In the letter, Berger noted that the electronic payments system benefits both consumers and merchants, as “many merchants are requesting cashless payments for employee safety and to streamline their operations” while interchange fees are “based on the cost of doing business and the cost of paying for fraudulent transactions.”

Additionally, Berger stressed that the bill is “about increasing the profits of big box retailers at the expense of consumers and financial institutions by creating government intervention in a free market and establishing a backdoor price control on the credit card system.” He also called out big box retailers, explaining “it is the height of hypocrisy” for retailers to want the benefits of card payments while preventing consumers from having their own benefit – such as rewards and fraud protections.

“If they do not like the rules of the payment card system, they can always accept cash,” wrote Berger.

He also touted findings from a 2022 report from the Government Accountability Office (GAO) that called the original Durbin Amendment, which imposed a cap on debit interchange fees for covered banks and credit unions, one of the top five laws to have the greatest negative impact on the cost of banking.

“Debit card interchange fee limits imposed by the Durbin Amendment and Regulation II are associated with increases in the costs of checking accounts, according to studies we reviewed and some market participants and observers we interviewed,” the GAO study found. “For example, a study conducted by Federal Reserve economists showed that certain banks subject to the interchange fee cap increased prices for checking accounts by increasing monthly service fees.”

Berger urged the Seante to reject the bill as both a standalone or amendment to another bill. Credit unions are urged to join the fight by using the NAFCU’s Grassroots Action Center to send a message urging their lawmakers to oppose the bill. NAFCU will continue fighting to protect interchange fees and other noninterest income to ensure credit unions can keep providing their members with safe, reliable, and affordable financial services.