An association representing U.S. military credit unions sent a letter to Virginia’s U.S. Senators in opposition to proposed credit card regulations pending in the U.S. Senate.
“On behalf of America’s 182 Defense Credit Unions and almost 40 million members, I am writing to express the Defense Credit Union Council’s ongoing concerns with to the proposed Credit Card Competition Act,” wrote Jason Stverak, Chief Advocacy Officer of the Defense Credit Union Council (DCUC), in a letter to Sens. Tim Kaine (D) and Mark R. Warner (D).
“The proposed legislation will risk military financial readiness while securing yet another windfall for big box retailers and e-commerce giants,” wrote Stverak. “America cannot afford to endanger millions of military and veteran members by incentivizing merchants to route transaction data over cheap, unsecure networks with zero accountability.”
The “Credit Card Competition Act”, S. 1838, would require banks to offer merchants at least two network options, one of which cannot be Visa or Mastercard, for processing credit card transactions.
The bill applies to credit cards what a similar measure in 2010, often referred to as the “Durbin Amendment,” applied to debit cards. The 2010 measure was a requirement of the “Dodd–Frank Wall Street Reform and Consumer Protection Act.”
A 2014 George Mason University study found that the 2010 “Durbin Amendment” led to a 50% reduction in the number of “fee-free” accounts offered by banks between 2009 and 2013, and doubled average monthly fees on “non-free” current bank accounts.
The study also said the measure resulted in an increase of 1 million “unbanked” Americans in the year after the measure was enacted.
“We doubt the American public wants to read that Congress voted to increase merchant profits by exploiting Medal of Honor recipients, Purple Heart recipients, former POWs, and Disabled Veterans,” wrote Stverak. “Our nation’s defense credit unions understand that now more than ever we need to put our nation’s service members first and reject the hollow call for new laws that would make basic financial services even more expensive for working-class Americans.”
Established in 1963, the DCUC is an organization representing credit unions that serve the United States military and their families. The council offers educational programs, advocacy, and resources to help member credit unions address the financial needs of service members.
