CCCA would repeat Durbin Amendment’s costly mistake

Despite its name, the Credit Card Competition Act (CCCA) would “weaken fraud protections, disrupt a payment system consumers rely on every day, and produce unintended consequences that outweigh its promised benefits.”

In her op-ed published in the Bangor Daily News Wednesday, Maine Credit Union League President/CEO Elise Baldacci said the misguided proposal would fail to deliver consumer savings while increasing risk.

“Swipe fees help fund services consumers utilize every day, from fraud protection and access to credit to rewards programs that help families stretch their budgets,” she wrote, responding to an op-ed in support of the CCCA. “For credit unions, that revenue also supports affordable financial services and member benefits that households and businesses depend on. If that revenue is reduced, Mainers could see fewer rewards, weaker protections, and less access to the benefits they value.”

She notes that similar interchange caps were placed on debit cards through the Durbin Amendment, which promised lower prices for consumers.

“The results tell a different story. Five years later, a study by the Federal Reserve Bank of Richmond found that most retailers did not pass their savings on to consumers,” she wrote. “Meanwhile, consumers lost valuable benefits, including rewards programs, and access to free checking accounts declined significantly. So knowing this history, the data on the CCCA isn’t surprising: nearly all of the projected savings will flow to big box retailers with more than $500 million in annual sales.”

She urges policymakers to fully examine tradeoffs that come with policies like the CCCA and remember “similar federal regulations failed to deliver meaningful savings for consumers while weakening benefits and services many relied on.”

Read the op-ed