A pair of U.S. congressmen have introduced the House companion to the Senate’s Credit Card Competition Act of 2022, designed to bring more choice to the credit card market.
“Credit card companies and mega banks keep finding new ways to squeeze our small retailers in Vermont,” Rep. Peter Welch (D-VT) — who introduced the bill with Rep. Lance Gooden — said in a news release Monday (Sept. 19).
“In a well-functioning market, there is competition and choice. That does not exist in our current credit card network market. This bipartisan bill will correct that and bring much needed competition to the Visa-Mastercard duopoly. This long-overdue bill will help our small businesses thrive and lower household costs for families at a time when they really need it.”
Gooden, a Republican from Texas, added that the legislation would remedy a situation in which “major credit card companies and the nation’s top financial institutions have collaborated to sideline community banks and local retailers in Texas.”
Introduced in July by Senators Dick Durbin, a Democrat from Illinois, and Roger Marshall (R-KS), the act requires banks with assets of more than $100 billion to allow electronic credit transactions to be processed on no fewer than two unaffiliated networks, at least one of which must be outside the Visa-Mastercard network.
Seen it Before
While supporters and sponsors say the legislation will save consumers money and bring more competition to a market that is currently dominated by Visa and Mastercard, the head of the industry’s leading trade group disagrees.
“This bill is just the latest attempt by Walmart, Target, and other big-box retailers to impose a multibillion-dollar corporate welfare scheme on the nation’s credit card industry,” Electronic Payments Coalition chairman Jeff Tassey said in a statement emailed to PYMNTS, adding that prior efforts have also seen retailers promising to pass on savings to consumers but pocketing the windfall themselves.
Earlier this year, Durbin and Marshall were part of a bipartisan group of legislators who wrote to Visa and Mastercard, pleading with the companies to abandon their plans to increase certain fees, arguing that merchants would pass those fees onto consumers.
Rising costs are “the last thing American families deserve right now,” said the letter, signed by Durbin and Marshall, along with Welch and Rep. Beth Van Duyne, R-Texas.
A few days later, the National Retail Federation (NRF) joined the lawmakers in asking the companies to rethink the fee hike. Visa and Mastercard have said the fees help cover innovation and security measures.