The EPC Takes Aim at the CCCA And Illinois’s Interchange Law

The Electronic Payments Coalition has launched the latest salvo in its offensive against legislation seeking to regulate credit card interchange. This time the thrust takes aim at federal and state legislative efforts.

At the federal level, EPC executive chairman Richard Hunt said during a press conference late Wednesday morning the EPC is ready to once again “engage in the fight” against the Credit Card Competition Act when it is reintroduced.

Hunt’s comments were made against the backdrop of a meeting between the National Association of Convenience Stores and members of Congress this week. Hunt added that past announcements about the CCCA have coincided with NACS meets with members of Congress. 

In his remarks, Hunt noted that community banks, credit unions, and banks of all sizes are on the same page when it comes to opposing the CCCA. “It’s rare all three groups can get on the same song sheet,” says Hunt. “We also have the support of five unions and several airlines.”

First introduced in 2022 by lead sponsor Sen. Dick Durbin, D-Ill., the CCCA would require that credit card transactions offer merchants a choice of networks beyond Visa and Mastercard. The challenge facing CCCA proponents, including NACS, is convincing Republican lawmakers in the current Congress to support the bill, Hunt says. “I don’t think this Congress is a fan of Durbin and his policies,” Hunt says. “There are only two Republicans I know of that support [the CCCA].”

One of those Republicans is co-sponsor Sen. Roger Marshall, R-Kan. Republicans currently have the majority in the Senate and the House of Representatives.

Hunt argues that allowing merchants a choice of networks other than Visa and Mastercard for processing credit card transactions is akin to electric vehicle maker Tesla Inc. opening its business to a third party that doesn’t have what it takes to operate its technology. “The CCCA would force a company without the technical expertise to stand in for Visa and Mastercard,” Hunt says.

When asked whether prior support from Vice President J.D. Vance could help tip the scales in favor of passage for CCCA, Hunt replied that Vance supported the bill prior to his nomination for the Republican ticket in 2024. Since accepting the nomination, Vance has been quiet about his position on the matter. “Yes, Vance put his name on the bill as a sponsor, but there has been no activity from him since on the legislation,” Hunt says.  As a result, the EPC is “not concerned” that Vance will push for passage, Hunt adds.

CCCA supporters counter that position. “It’s shocking the EPC is so eager to insult the Vice President by asserting that he no longer believes what he said [about the CCCA],” says Doug Kantor, an executive committee member for the Merchants Payments Coalition and general counsel for the National Association of Convenience Stores. “It is disingenuous to do this.” Kantor adds he expects the CCCA to be reintroduced as “it has a lot of momentum.”

At the state level, Hunt attacked Illinois’s Interchange Fee Prohibition Act, which since its passage last year has faced legal challenges. The concern, according to Hunt, is that the Illinois interchange law will embolden other states to pass similar legislation. While several states are testing the waters on similar legislation, Illinois remains the only state so far to pass such a law. The IFPA, scheduled to go into effect July 1, requires merchants to exempt tax and tips from interchange.

“The Illinois law is a complete and utter disaster that creates credit card chaos,” says Hunt. “Exempting tax and tips from interchange means creating two transactions for a purchase, one that will be paid by card, the other with cash.” He argues the legal challenge to the IFPA is likely to give other states pause when it comes to introducing similar legislation because of the “cost of defending” the law. The next hearing in the legal battle to overturn the law is scheduled for March 18.

Supporters of the IFPA counter the law is a positive step for merchants in their fight to control credit card acceptance costs.

“By being the first state to stand up against out-of-control swipe fees, Illinois is a model for others across the nation to follow,” Rob Karr, president and chief executive of the Illinois Retail Merchants Association, says by email. “We’ve demonstrated that it is possible to challenge this opaque fee structure head-on, which recent court decisions have supported. We’re proud to lead efforts to bring relief to businesses and consumers and are encouraged that these efforts continue to catch fire in other states.”