Interchange, rate cap amendments are GENIUS Act ‘poison pills’

As the Senate begins consideration of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act (S. 1582), America’s Credit Unions is fighting two “poison pill” amendments in the works. Senators Roger Marshall, R-Kan. and Josh Hawley, R-Mo. have offered amendments that credit unions oppose. As originally written, the GENIUS Act would establish regulations for stablecoins and has America’s Credit Unions’ support.

Marshall's amendment contains the text of his previously introduced Big Box Bailout bill. Credit unions have strongly opposed Marshall’s interchange bill, as it would harm consumer choice and benefit big box retailers by mandating the use of third-party payment networks without the same level of cybersecurity protection and infrastructure currently in place. 

America’s Credit Unions signed onto a joint letter Wednesday (following its own letter of strong opposition sent Tuesday), reiterating the numerous negative consequences to the bill, and the research supporting it.

“The Durbin-Marshall bill, a poison pill amendment that has not been properly considered through the regular legislative process, would harm consumers, small businesses, and financial institutions alike by reducing choice, increasing costs and fraud risks, and create economic challenges for small financial institutions,” the groups wrote.

The letter highlights a recent study showing that the bill would reduce access to credit, particularly in smaller communities and low-income households.

America’s Credit Unions also joined financial services trade organizations in a letter opposing Hawley's amendment that would cap credit card interest rates at 10%.

The groups note that any government price controls, including annual percentage rate caps, hurt consumers.

“This amendment would eliminate access to credit cards for millions of consumers and drive them to sources of credit which are far more costly and less regulated,” it reads. “Many consumers who currently rely on credit cards would be forced to turn elsewhere for short-term financing needs, including pawn shops, auto title lenders, or worse–such as loan sharks, unregulated online lenders, and the black market.”

The Senate advanced the bill through several procedural votes Wednesday, and the amendments process is ongoing.