Saturday, July 13, 2024

‘Durbin 2.0’ rears head again within Congress

The Credit Card Competition Act has returned to Congress. This same legislation was introduced late last year and the supporters of this measure tried feverishly to get it passed in the last couple of days during the 117th Congress.

We greatly appreciate all the members who stood strong for community banks and opposed this measure at every turn. We have the same ask again for the 118th Congress as the bill has been reintroduced both in the Senate and in the House in the past month.

You can visit to send a automated letter to your member of Congress to oppose the bill.
Last month, the Oklahoma Bankers Association parterned with other state associations sending a letter to leadership in both chambers asking then to support their community banks and oppose this measure. The “Credit Card Competition Act” is also known as “Durbin 2.0” and we all remember what the original Durbin bill did to debit cards.

The original Durbin amendment eliminated debit card rewards, raised banking fees and increased fraud expenses all without lowering costs for your customers. The current version of this bill would do exactly the same to credit cards. The impacts of the bill are clear: fewer choices for consumers, increased threats to consumer data privacy, weakened local banks and the disappearance of card rewards programs.

The Credit Card Competition Act puts breach-prone merchants in charge of our nation’s credit card system. The bill’s sponsors claim it would provide merchants a choice of across which networks credit card transactions are processed. This dual-routing technology they are depending on doesn’t exist today, and for a good reason. A credit card transaction is an extension of the bank’s own funds to its customer. Therefore, it’s critical banks be allowed to carefully and deliberately select the network over which their own funds flow to the merchant.

While merchants specialize in selling groceries or shoes, financial institutions are payments experts responsible for and best positioned to protect their customers against fraud, loss of private data and the inefficiencies of unreliable systems. Financial institutions are also routinely checked for strong privacy, data security and fair lending practices, while merchants are not.

The Credit Card Competition Act demands card issuers enable all types of transactions and security protocols, even if a bank board finds these methods are unnecessary, unaffordable or unsecured. Putting merchants in charge of these decisions would mean adopting many more than two networks, the only route to avoid a costly enforcement action from regulators.
The Durbin Amendment proves the Credit Card Competition Act claims about protecting small banks is absolutely false. The legislation doubles-down on the harm already caused by the original Durbin Amendment.

In the last Congress, the OBA worked with our delegation on this bill, and we are grateful that not one single member signed on to support the Act. We are again working with our delegation in Washington to protect community banking in Oklahoma.