September 21, 2022

Berger underscores major concerns around House version of CCCA

Capitol HilNAFCU President and CEO Dan Berger Tuesday sent a letter to the House, voicing major opposition to the recently introduced House version of the Credit Card Competition Act of 2022 (CCCA). Berger explained why the House companion bill, led by Representatives Peter Welch, D-Vt., and Lance Gooden, R-Texas, poses the same risks to consumers and Main Street as its Senate counterpart.

Berger reacted to the introduction of the bill earlier this week stating that it will “fail consumers at a time when financial well-being is of the utmost importance,” calling it a “bad idea, plain and simple.”

In the letter, Berger detailed the many negative impacts of CCCA underscoring its feeble attempts at expanding the failed Durbin Amendment, enacted in 2010 as part of the Dodd-Frank Act which later proved to pass minimal, if any, savings to consumers. Berger noted a Federal Reserve Bank of Richmond study which showed that after the Durbin Amendment was implemented, “98.8 percent of merchants did not pass along savings realized from debit regulation to consumers and over 20 percent increased prices.”

“The Credit Card Competition Act of 2022 is not about competition,” wrote Berger. “It 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 back-door price control on the credit card system.”

Of note, Berger also pointed out that big box retailers would have full control over the payments network, taking away consumers’ autonomy over processing their credit card transactions. Retailers would have the ability to opt for cheap, untested networks, putting many consumers at risk. Not to mention that higher credit card costs would be passed along to consumers and the financial institutions who serve them.

NAFCU has fervently opposed this anti-consumer bill, most recently sharing the harmful effects with more than 50 Congressional and Federal Reserve staff members, during the association’s 2022 Congressional Caucus last week. During the hour-long briefing, co-host NAFCU Senior Vice President of Government Affairs Greg Mesack reiterated how this legislation would turn the payments system on its head and take away credit unions’ ability to provide low-cost, and sometimes free, financial products and services.

In addition, Berger recently wrote an op-ed on why enacting the CCCA would also worsen inflation pressures for Americans by limiting consumers' access to safe and secure payment networks during credit card transactions.

“The impact is real. And if that isn’t enough, mom-and-pop shops, who are already struggling to keep their business running, would now be expected to adopt new point-of-sale hardware system to accommodate for the mandates,” wrote Berger. “Americans are already feeling the heat of inflation. They don’t need added concerns about where their transactions are being routed and whether they’re safe.”

Read the full letter. NAFCU will continue to advocate against this legislation on behalf of the credit union industry and its 133 million members and will update members via NAFCU Today.