Credit Card Swipe Fee Amendment Pulled From Defense Spending Bill

A last-minute bipartisan effort to package a credit card swipe fee amendment into a larger spending bill was ultimately unsuccessful.

Sen. Dick Durbin (D-Ill.) and Sen. Roger Marshall (R-Kan.) pushed to slip the Credit Card Competition Act of 2022 into the National Defense Authorization Act (NDAA), prompting alarms from banks, credit unions and other financial service providers who argued that the move would upend credit card loyalty programs.

Read more: The Unintended Consequences of Durbin’s Proposed Routing Legislation

The Credit Card Competition Act (CCCA) is aimed at diluting the market power of card issuers Visa and Mastercard and would require several changes, including the requirement that merchants have at least one network for credit card transactions unrelated to Visa or Mastercard.

A spokesperson for Marshall’s office told PYMNTS the legislation is far from dead and remains a standalone bill that’s before the Committee on Banking, Housing, and Urban Affairs. Marshall plans to fight to get the bill passed using whatever opportunity comes up to do so, the spokesperson added.

PYMNTS reached out to Durbin for comment.

The National Association of Federally-Insured Credit Unions (NAFCU) was among many opponents to the bill, pointing to the potential damage it would likely cause customers.

See also: Lawmakers Debut House Version of Credit Card Competition Act

“Because of the tireless efforts of NAFCU, our member credit unions and our trade association coalition partners, we were able to keep the harmful Credit Card Competition Act and the interchange issue out of the Amendment in the Nature of a Substitute offered to the National Defense Authorization Act (NDAA) in the Senate,” NAFCU President and CEO Dan Berger told PYMNTS.

“This is a big win for credit unions, but we need to continue the fight to make sure lawmakers fully comprehend the damage this bill would have on the financial services industry and American consumers. NAFCU pledges to keep fighting this issue on behalf of credit unions and consumers,” Berger added.

Related: Report: Walmart, Target Urge Support for Credit Card Competition Bill

Introduced in the Senate in July and the House in September, the bill requires banks with assets of more than $100 billion to allow electronic credit transactions to be processed on no fewer than two unaffiliated networks, at least one of which must be outside the Visa-Mastercard network, PYMNTS reported on Sept. 19.

The bill would have ultimately empowered merchants to change payment rails to save on swipe fees, but the move would be unbeknownst to consumers, who could miss out on fraud protections and loyalty rewards, opponents of the bill have argued.

Jeff Tassey of the Electronic Payments Coalition said now that neither the bill nor Sen. Durbin’s study amendment is in the NDAA, “we have to plan for the Omnibus Appropriations bill in the lame duck.”