Phoenix-Like, a Bill Aimed at Controlling Credit Card Acceptance Costs Rises Again

The Credit Card Competition Act is making a comeback, this time with more bipartisan support. The bill, originally launched last summer by Sens. Richard Durbin (D-Ill.) and Roger Marshall (R-Kan,), is expected to be reintroduced in the Senate, apparently with few changes, as early as this week, according to an early report by The Wall Street Journal. Sens. Peter Welch (D-Vt.) and J.D. Vance (R-Ohio) are expected to sign on as additional sponsors of the bill, according to reports.

A so-called companion bill is set to be introduced in the House of Representatives in an effort led by Republican representatives Lance Gooden (Texas), Jefferson Van Drew (New Jersey), and Tom Tiffany (Wisconsin.). Last year, only Gooden among Republicans led backing in the House for a companion bill

The legislation, which applies to financial institutions with $100 billion or more in assets, aims to control merchants’ costs for credit card acceptance by requiring that sellers have a choice of at least one network other than Visa or Mastercard for each transaction. Durbin and other sponsors see the bill as a response to longstanding complaints from merchants about rising costs for taking credit cards. Durbin shepherded similar legislation through Congress more than a decade ago to put a damper on merchants’ costs for debit cards.

The CCCA went as far as the Senate Banking Committee last year, where it languished after failing to receive a vote. Proponents now pin their hopes on the bill’s additional bipartisan endorsements. They also hope to gain support by positioning the bill as a way to constrain rising consumer costs.

A release early Wednesday from Marshall’s office refers to “credit card swipe fees instituted by big credit card companies in conjunction with Wall Street banks that increase costs on consumers and small businesses, further fueling inflation.”

Marshall, along with Vance, Gooden, and Van Drew, plus Leslie Sarasin, president and chief executive of the Food Industry Association, Mike Beal, chief financial officer of Balls Food, and Brad Close, president of the National Federation of Independent Business, are expected to speak at 12:30 p.m. Wednesday in an effort to throw support behind the reintroduction of the legislation.

While the bill appears to have attracted additional bipartisan support, trade groups representing the payments industry on Tuesday condemned the legislation. The bill, if it becomes law, will benefit big-box merchants such as Target and Wal-Mart while gutting rewards programs, weakening protections against fraud, and restricting credit access for consumers, the groups alleged in a joint statement issued by the Electronic Payments Coalition, a Washington, D.C.-based lobbying group.

Strong opposition from such players could mean the way ahead may be rocky for the legislation, observers say, as forces against the CCCA could grow when more members of the payments community have a chance to react to the bill’s reintroduction in Congress. “The bill faces an uphill struggle,” notes a spokesman for the Electronic Transactions Association, a Washington, D.C.-based group.