No financial institutions were called as witnesses during Tuesday’s Senate Judiciary Committee hearing on the big Box Bailout bill, but some members and witnesses said that — despite the bill’s name — it would harm competition in the payments industry. America’s Credit Unions submitted comments before the hearing expressing concerns and showing data demonstrating that the bill would have negative impacts on consumers, merchants, and financial institutions.

“It’s disappointing that there was a hearing for the Big Box Bailout bill without inviting input from credit unions that will be negatively impacted by the proposed changes,” America’s Credit Unions Chief Advocacy Officer Carrie Hunt said. “The Senate Judiciary Committee has no jurisdiction over this issue, and without proper perspectives this was an ineffective use of Congress’ time. We will continue to fight against the Big Box Bailout bill and other attempted changes to the interchange system that will benefit merchants at the expense of consumers and credit unions.”

The bill “will almost certainly lead to detrimental effects across the payments ecosystem — reduced card choice, increased cardholder confusion, billions of dollars in sunk costs from reissuing hundreds of millions of credit cards, higher bank fees, fewer rewards, and riskier transactions on less secure networks,” said Linda Kirkpatrick, president, Americas at Mastercard. She added it would “remove incentives to invest in technology to combat fraud.”

Bill Sheedy, senior advisor to the CEO at Visa, said the bill is not only unnecessary but potentially “deeply harmful” to competitiveness and innovation in the payments industry. 

“[E]veryone thrives when we strive to maintain the success and security of payments through dynamic market-based competition, without static regulatory mandates that would create significant inefficiencies, impede security, stifle innovation, and undermine the freedom to choose payments that American consumers and merchants enjoy today,” he said. 

America’s Credit Unions believes the bill would threaten the current interchange system – that currently works for all involved – for the sole benefit of the biggest retailers. Research shows this bill would have several direct consequences for consumers, and a majority of small businesses oppose it, according to the Small Business Administration.