Durbin Urges the Senate to Bring His Credit Card Competition Act to the Floor for a Vote

The bipartisan bill was recently endorsed by key unions, consumer groups, and small businesses

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.  During his speech, Durbin applauded key unions’ endorsement of the bill, including the International Brotherhood of Teamsters and the Service Employees International Union (SEIU).  He also condemned the Electronic Payments Coalition who have spent a combined $51 million lobbying against this legislation since 2022 and debunked claims that the bill will harm credit card rewards.

“Each time a credit card is used—to make a donation to the Red Cross, purchase groceries, fuel, diapers, or anything else—Visa and Mastercard charge a fee.  Some of that they keep for themselves, but most is given to the bank that issued the card.  Today, Visa and Mastercard control around 80 percent of the credit card market in the United States of America, wielding enormous power over the American economy.  Visa and Mastercard set these interchange fees or swipe fees on behalf of thousands of banks, leaving merchants—many of them small businesses and restaurants—without a choice but to accept the outrageous fees.  There is no negotiation.  There is not competition.  And small business owners and consumers face a take it or leave it choice,” Durbin said.

Building off of debit card competition reforms enacted by Congress in 2010, the Credit Card Competition Act would direct the Federal Reserve to ensure that the largest credit card-issuing banks offer a choice of at least two networks, one of which must be a network other than Visa and Mastercard, 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.

“It is no surprise that the credit card industry is paying a pretty penny to convince consumers that my bill will take away their credit card rewards,” Durbin said.  “In fact, a new report found that Visa, Mastercard, Wall Street, and the industry trade groups they fund, such as the Electronic Payments Coalition, have spent a combined $51 million lobbying against my bill since 2022.  They also have recruited allies, including some in the airline industry, to breathlessly claim that my bill would make frequent flyer rewards programs disappear.  United Airlines CEO Scott Kirby recently said that my legislation would, ‘kill rewards programs.’  Let me be very clear: That is a patently false statement.”

A recent study found that if the bill was enacted, it would have a negligible impact, at most, on rewards, and noted that banks’ swipe fee profits provide a more than sufficient margin to maintain current reward levels.  In 2015, the EU capped credit interchange fees at 0.3 percent—compared to the current U.S. rate between two to three percent.  But major European airlines still offer co-branded credit cards and frequent flyer programs that are comparable, if not better, than the ones offered by U.S. airlines.  Moreover, this past July, Forbes published an article saying that compared to other nations, airline rewards programs in the U.S. have made it more challenging to earn and redeem miles.

“So let me repeat: My bill is not coming for your rewards.  And any effort by the airline industry or big banks to convince you otherwise is just a scare tactic.  They are feigning concern for hardworking Americans’ interests to protect their bottom line,” Durbin continued.

During his speech, Durbin praised both the Teamsters and SEIU endorsements of the bill.  Teamsters General President Sean M. O’Brien said in his endorsement, “Union members and American families cannot afford to sacrifice so much of their hard-earned wages to predatory and consolidated credit card corporations trying to skim every last dollar they can from vulnerable consumers.”

Durbin said, “And just before Thanksgiving, a diverse group of organizations representing workers, small businesses, and competition advocates launched the ‘Lower Credit Card Fees Coalition’ urging Congress to pass the Credit Card Competition Act.  Few things could unite unions, businesses, consumer groups, and a bipartisan group of Senators—this bill does just that.  Because it will benefit hardworking Americans.” 

“Far from threatening rewards programs or hurting workers, the bill will benefit Americans who currently are paying the price forthe credit card industry’s price-gouging schemes.  It will give a fighting chance to the small businesses and restaurants we want to see stay open, support the mom and pop shops that make our communities feel whole, and ultimately keep money in the pockets of hardworking Americans.  It is time we bring this commonsense, consumer-protecting, bipartisan legislation to the floor for a vote,” Durbin concluded.

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.

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.