Durbin Takes Final Swipe at Credit Card Competition Act

Sen. Dick Durbin is at it again. On Jan. 13, the soon-to-retire Illinois Democrat reintroduced the Credit Card Competition Act.

His move now has an added sense of urgency as a result of recent public statements made by President Trump. The president suggested his willingness to take another look at credit card fee charges and how much control each credit card company has over its network.

Durbin said this is the last push to try to regulate the swipe fees and reduce what he says is the dominance of Visa and Mastercard.

This time, the move carried extra heft. Durbin has seniority, leverage, cutting rhetoric, and is not running for reelection. That fact has framed the effort as his last serious chance to bring the bill across the finish line. For credit card issuers and networks, the events test margins, rewards economics, and credit availability.

Senator Durbin’s efforts to control how payment is routed through credit cards have roots in prior work related to debit cards. He supported the Durbin Amendment limiting debit interchange fees while allowing consumers to choose a network.

The Credit Card Competition Act attempted to require the four biggest US banks utilize two or more separate unaffiliated credit card networks. The bill failed, but Durbin did not retreat.

Durbin used his Senate Judiciary Committee chairmanship to elevate the issue through hearings. He later tried to fold the language into stablecoin legislation, specifically the GENIUS Act. Now the bill has returned as a standalone effort, backed by stronger rhetoric and fresh political tailwinds.

Durbin has seniority, power over committees, and little time left to act.

Public frustration with merchant fees is increasing, and merchant complaints about how much it costs to swipe cards are reaching a crescendo. This has led to a renewed debate over the extent to which Congress should influence the way private companies — Visa and Mastercard — process their own transactions.

But Brian Riley, Director of Credit Advisory Services and Co-Head of Payments at Javelin Strategy & Research, said this is a stark question.

“Do you want to start nationalizing or taking over the payment records? On an annual basis, about $4 trillion goes through the system,” he said. “You’re going to decrease interchange by x. Let’s call it, in this case, x about 80%. That’s a big chunk of the number. The reaction on the issuing side is to reduce the availability of credit,” he said. “It’s a no-brainer.”

Durbin has argued that lower interchange would reduce costs for merchants and consumers. Critics counter that history shows otherwise.

Smaller community banks and credit unions could face a cut in interchange income, similar to what occurred after debit regulation.

Opponents of the bill argue that the consequences would extend beyond pricing.

In a joint statement opposing the legislation, the American Bankers Association warned that supporters of the proposal were “voting to make credit card transactions less secure and to take away the credit card reward programs that make life more affordable for millions of Americans.”

Issuers face additional pressure from investor expectations, securitization structures, and contractual obligations.

Riley said that the risk extends beyond banks themselves to investors behind those institutions. He said that card economics extend far beyond swipe fees. “Nobody was expecting any funky change that’s going to wave a wand and invalidate these contracts,” he said.

Durbin builds support for the bill and uses congressional hearings to raise awareness on the issue. As the bill continues to stall in Congress he is looking for an alternative way to pass his legislation as quickly as possible. His determination is a key to the story.

Even supporters admit the bill would reshape credit card economics. Opponents say the cost would show through fewer rewards and tighter credit. Consumer choice would decrease as well, critics contend.

Durbin appears ready to accept that trade even if it leads to tighter credit, fewer rewards, and higher pressure on issuer economics. Whether this marks a breakthrough or another chapter remains uncertain. What no longer seems uncertain is his willingness to keep trying until the clock runs out.