Wednesday, July 24, 2024

OBA joins other banking associations urging rejection of credit card routing mandates

A proposed bill that would impose routing requirements on banks that issue credit cards is an anti-consumer, anti-competitive and cynical attempt by the largest global merchants and biggest grocery chains to obtain a subsidy for themselves, the OBA, American Bankers Association and 48 other state bankers associations said last week in a letter to House and Senate leaders.

The Credit Card Competition Act was introduced by Sens. Dick Durbin (D-Ill.) and Roger Marshall (R-Kan.) in the Senate and by Reps. Lance Gooden (R-Texas) and Zoe Lofgren (D-Calif.) in the House. In their letter, the OBA and its sister associations said the bill was written to deliver a major payday for big retail and big grocery at a time when giant retailers have been getting even bigger. They also said not to be fooled by claims the legislation would exempt community banks or help small businesses, as the same claims were made a decade earlier during the Durbin Amendment debate, “yet small, ‘exempt’ banks saw a quarter of their debit card revenue disappear and fraud costs increased after it became law.”