Opposing efforts to add interchange price caps to stablecoin legislation

Credit union efforts are underway to stop the Senate from adding interchange language to the stablecoin bill as it considers the bill this week. In a letter to Senate leaders, America’s Credit Unions opposed adding language from the Big Box Bailout bill to the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act (S.1582). Sen. Roger Marshall, R-Kan., filed the the interchange amendment Tuesday as the Senate prepares to start considering the GENIUS Act today. The amendment would strip consumer choice by mandating the use of third-party payment networks that benefit big box retailers without the same level of cybersecurity protection and infrastructure currently in place. 

The interchange language is identical to the bill introduced in the last Congress by Marshall and Sen. Dick Durbin, D-Ill., as the Credit Card Competition Act.

“This interchange language has no place in the GENIUS Act. It would drive up costs for Main Street America - consumers, small businesses and small financial institutions, including credit unions,” says Jim Nussle, America’s Credit Unions President/CEO. “The disruption to the credit card payment system would negatively affect consumers’ access to needed credit and services they depend on. This amendment is a poison pill to the legislation, and we urge Senators to oppose it as it would hurt hardworking Americans.” 

As originally written, the GENIUS Act would establish regulations for stablecoins and has America’s Credit Unions’ support. Senate Majority Leader John Thune, R-S.D., had indicated that the bill would be considered in regular order, making it open to amendments during floor consideration, although an agreement on which amendments may actually get considered and voted on by the Senate has not yet been reached. 

America’s Credit Unions’ letter notes the Big Box Bailout bill would:

• Increase the profits of big-box retailers at the expense of consumers and financial institutions by “creating government intervention in a free market and establishing a backdoor price control on the credit card system;”
• Cause consumers to lose credit card choice, have less data security, and incur increased costs to obtain credit; and
• Negatively impact credit union service to members, as increased costs will result in less services like free checking accounts.

A study released last week from the University of Miami’s School of Finance confirms America’s Credit Unions’ concerns about legislation changing interchange, noting that it would lead to reduced access to credit. America’s Credit Unions signed onto an earlier joint letter urging members of Congress to oppose the Big Box Bailout bill whenever it is reintroduced.