The Defense Credit Union Council, which represents 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.
“The Credit Card Competition Act is a misnomer—it does nothing to enhance competition and everything to consolidate power in the hands of the largest retailers at the expense of consumers, small businesses, and community financial institutions,” said Anthony Hernandez, DCUC President and CEO, in a press release. “If Congress enacts this legislation, consumers will lose rewards programs they depend on, small businesses will face greater financial strain, and community banks and credit unions will struggle to provide essential services. This is a solution in search of a problem—one that will only create new ones.
The U.S. Senate sponsor of the perennially-introduced bill, U.S. Sen. Dick Durbin (R-Ill.), recently said he plans to re-introduce the legislation in the current congressional session, reported Payments Dive.
The legislation 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.
The DCUC last year said the legislation could “risk military financial readiness..”
“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,’ said the organization in a May 2024 letter to the U.S. Senate.
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.
