Credit Card Competition Act Amendment Stripped from Housing Bill in Legislative Setback

The Credit Card Competition Act (CCCA) did not move ahead with the passage of the 21st Century ROAD to Housing Act after all, despite a push from Senators Roger Marshall (R-KS) and Dick Durbin (D-IL). 

Marshall filed an amendment that aimed to attach the CCCA to the housing bill. And while the Senate voted to pass the housing affordability package, it did not include language from the CCCA in the final legislation. 

Credit card issuers looking to protect revenue and maintain the status quo when it comes to payment routing are likely pleased with the outcome.

The CCCA picked up momentum this year after President Donald Trump signaled his support for the act on social media in January. But Durbin and Marshall will need a new scheme to push the plan forward at this point. 

Earlier this month, Richard Hunt, Executive Chairman of the Electronic Payments Coalition, had criticized Durbin and Marshall for trying to affix the CCCA to the housing act.

“Groundhog Day might have been last month, but Senators Durbin and Marshall are replaying the same failed script — desperately trying to jam their economy-crushing credit card mandates onto any bill moving through Congress,” Hunt said in a statement. 

“Not only does this latest attempt reek of desperation, it proves they know this government takeover of Americans’ wallets cannot stand on its own,” he added.

How Durbin and Marshall plan to move forward with the Credit Card Competition Act after their latest setback is not clear. The two senators likely thought that it was a logical move to try to attach the CCCA to the housing bill.

A recent PYMNTS report discloses that supporters of the CCCA think that expanding routing options will lead to lower swipe fees, but that’s not an opinion that everyone shares.

“I think the intended goal from Marshall and Durbin is really to reduce costs for consumers,” Brian Scott, Co-Founder and Chief Growth Officer at RAI Partners, told us. “Well, when we saw that happen on debit cards, costs did not go down for consumers. It really just kind of became a profit item for the retailers.” 

Julian Morris, Senior Scholar at the International Center for Law & Economics, recently warned in a web post that lower revenue from interchange could compel banks that issue cards to increase other fees or reduce cardholder benefits such as rewards. 

“By diverting traffic away from the major cards’ networks, the routing mandate would also reduce the effectiveness of the cards’ security features, resulting in an increase in preventable fraudulent transactions,” Morris explained.

In spite of recent events, we likely haven’t seen the last of the Credit Card Competition Act. We’ll continue to monitor further developments with the CCCA as they unfold.