Durbin Urges The Senate To Bring His Credit Card Competition Act To The Floor For A Vote

The bill would enhance competition and choice in the credit card network market, which is currently dominated by the Visa-Mastercard duopoly

WASHINGTON  In a speech on the Senate floor today, U.S. Senate Majority Whip Dick Durbin (D-IL), Chair of the Senate Judiciary Committee, urged the Senate to bring his Credit Card Competition Act, bipartisan legislation he introduced with U.S. Senator Roger Marshall, M.D. (R-KS) to the Senate floor for a vote.  The bill would enhance competition and choice in the credit card network market, which is currently dominated by the Visa-Mastercard duopoly. 

“We're fighting inflation in America, and Visa and Mastercard are on the other side of the battle. Consumers and retailers are trying to keep prices down.  Visa and Mastercard are trying to run them up with a fee they charge for each transaction,” said Durbin. 

Building off of debit card competition reforms enacted by Congress in 2010, the bill would direct the Federal Reserve to ensure that the largest credit card-issuing banks offer a choice of at least two networks over which an electronic credit transaction may be processed.  U.S. Senators Peter Welch (D-VT) and J.D. Vance (R-OH) also joined Durbin and Marshall in introducing the legislation, and it’s estimated to save merchants and consumers $15 billion each year.

“American consumers today are concerned about inflation and the high prices of groceries and gas.  What they may not know is that the fees charged when they use their credit card, known as swipe fees, are adding to this problem,” said Durbin.  “Each time a credit card is used—whether for groceries, gasoline, critical drugs, or anything else—Visa and Mastercard charge an interchange fee.  Some of that they keep for themselves, but most of it is given to the bank that issued the card.”

Durbin continued, “Visa and Mastercard set the fees on behalf of thousands of banks and tell merchants, the retailers, the restaurants to take it or leave it.  Merchants have no real choice but to accept the outrageous fees if they want to have credit cards used by their customers.  There is no negotiation or competition.  Small business owners and consumers, take it or leave it, are holding the bag.”

Visa and Mastercard wield enormous market power in credit cards; according to the Federal Reserve, they account for nearly 576 million cards, or about 83 percent of general-purpose credit cards.  Visa’s and Mastercard’s market power and network structure have enabled them to impose fees on U.S. merchants that are among the world’s highest, charging a total of $93 billion in U.S. merchant credit card fees in 2022.   These fees include interchange or swipe fees which Visa and Mastercard require merchants to pay to issuing banks, as well as network fees that Visa and Mastercard require merchants to pay directly to them.  Consumers ultimately pay for all of these fees in the price of the goods and services they buy.  Interchange fees are the second largest cost for many small businesses—only behind labor costs.

“Despite the nearly $100 billion Visa and Mastercard took out of communities and small businesses across the country last year, guess what they’re going to do in October?  They’re going to raise fees again.  While we’re trying to fight inflation at every angle we can find to bring down the cost of groceries and gas, the credit card companies have decided it’s just the right time to have this take it or leave it fee increase,” said Durbin.“When credit card fees go up, it increases [inflationary pressures].  And consumers ultimately pay the price.  I strongly urge Visa and Mastercard to reconsider their profoundly misguided decision… I’m not holding my breath.”

“I stood up to the big banks and the card giants in 2010 when I introduced similar reforms to the debit card market.  And I will always choose Main Street over Wall Street.  It is long overdue for Congress to break up the sweetheart deal that Visa, Mastercard, and the biggest banks in America, and certain airlines, enjoy.  We must bring the bipartisan Credit Card Competition Act to the floor for a vote,” Durbin concluded.  “The question is whether my colleagues will listen to the consumers and families that are struggling with inflation, whether they'll listen to the restaurants that they frequent as I do, whether they'll listen to the small shops and businesses that have to pay these outrageous fees.  Give them a chance.  Tell Visa and Mastercard they cannot lord over these people who are working hard for a living and shouldn't be stuck with these duopoly fees.”

Video of Durbin’s remarks on the Senate floor is available here.

Audio of Durbin’s remarks on the Senate floor is available here.

Footage of Durbin’s remarks on the Senate floor is available here for TV Stations.

The Credit Card Competition Act is supported by organizations including the American Beverage Licensees, Armed Forces Marketing Council, Energy Marketers of America, FMI, Hispanic Leadership Fund, International Franchise Association, National Association of College Stores, National Association of Convenience Stores, National Association of Theater Owners, National Grocers Association, National Restaurant Association, National Retail Federation, National Wildlife Refuge Association, NATSO, NFIB, Retail Industry Leaders Association, SIGMA, U.S. PIRG, and over 200 state and regional business associations.

A one-pager of the bill can be found here