ARLINGTON, VA — The American Consumer Institute (ACI) issued the following statement regarding the reintroduction of the Credit Card Competition Act (CCCA) :
The reintroduction of the Credit Card Competition Act (CCCA), if enacted, would make American consumers worse off. The bill attempts to do for credit cards what the Durbin Amendment to the Dodd-Frank Act did for debit cards.
The main effect of the CCCA will be to mandate credit card issuers and banks with over $100 billion in assets to offer at least one smaller and newer credit card network as a credit transactor alternative to VISA and Mastercard. This is intended to expand competition and theoretically result in lower interchange fees. The problem is that by mandating card issuers and banks to offer users various smaller alternatives, they expose consumers to networks with weaker security, endangering financial data.
Additionally, any savings made by merchants from reduced interchange fees have not been shown to pass down to consumers. The only outcome that is likely to occur is reduced credit rewards as issuers lose this revenue source and incentive to maximize card usage. After the passing of the Durbin Amendment, debit card rewards programs dried up, affecting nearly 80 percent of households with incomes of less than $50,000 that rely on rewards programs.
The CCCA is bad news for consumers, and if the Senate has learned anything from the Durbin Amendment, then it will reject this bill.
Email [email protected] to set up a conversation with any of our expert team or to learn more about ACI.