Save The Points, Stop The Credit Card Competition Act
While Republicans are planning their impending takeover of the House of Representatives and packing up to head home for the Christmas break, Democrats in the Senate still have a lot on their minds. One piece of legislation that Senator Dick Durbin has been trying to shove through the process for many years now is a small change to the way credit cards operate in the US. If passed, Durbin’s Credit Card Competition Act of 2022 would create price controls on the fees that payment processors charge to retailers like Walmart & Amazon in exchange for completing the transaction.
Though this may seem like a fight between high and mighty politicians, bankers, and business titans like Jeff Bezos, Durbin’s bill could have significant implications for everyday people like you and me.
Every day, millions of Americans benefit from the numerous perks of banking with and using the financial products of firms like Chase, Visa, and Capital One. These institutions, in an effort to win your business, create all kinds of loyalty programs and incentives for us to join. These range from point programs that we can redeem for cash to free checking accounts with no annual fees. Overall, this is a very Pro-Consumer system that benefits us as a country and helps give access to financial products to lower-income Americans.
These companies can afford to create these programs because of the fees they charge corporations for their services. In other words, the “swipe fees” often cover your free flight to Cabo or that 2% cash back on drug store purchases. By passing Durbin’s law, the banks would have no way to fund these programs, and all of the money that would have been pushed toward the consumer through loyalty programs would go to massive retail corporations.
With inflation on the rise, Americans all over are looking for ways to save money. Loyalty points are one of those ways – in fact, there are even tons of online resources that teach people how to get the most for their purchases. One such site is ThePointsGuy.com. In a recent article on this bill, Nick Ewen shared these startling implications of Durbin’s bill.
“An article from George Mason University estimated that the amendment transfers “$1 billion to $3 billion annually from low-income households to large retailers and their shareholders.”
A study from the University of Pennsylvania noted that average monthly checking account fees increased by over 70% as a result of the Durbin Amendment.
The unintended consequences of imposing similar regulations on credit cards could mean higher prices for consumers.”
At a time when the economy is sputtering, and everyday people are just trying to make a living, we do not need Dick Durbin handing more money over to BIG BUSINESS. This sweetheart deal cannot pass – Save Our Points, Stop The Credit Card Competition Act.