Florida credit unions want Marco Rubio, Rick Scott to vote against credit card crackdown

The Florida Credit Union Association (FCUA) remains concerned about proposed legislation to boost credit card regulation at the federal level.

The organization sent letters to U.S. Sens. Marco Rubio and Rick Scott, both Republicans, asking them to prevent passage of the Credit Card Competition Act.

“We believe access to credit should be available to all, and that means ensuring that big government federal mandates are not allowed to enter this marketplace at the expense of consumer choice, rewards programs, and the integrity of a functioning payment processing system that is at present free from the ownership or interference of the Chinese government,” wrote Samantha Beeler, president of the FCUA.

The Credit Card Competition Act was recently reintroduced by U.S. Sen. Dick Durbin, an Illinois Democrat. His office said the legislation aims to stop unfair practices by credit card giants like Visa and Mastercard, particularly regarding network and interchange fees.

“The Credit Card Competition Act of 2023 would enhance credit card competition and choice in order to reduce excessive credit card fees,” reads a bill explainer on the Senate website. “It would require the largest credit-card issuing financial institutions in the country — those with assets over $100 billion — to enable at least two credit card networks to be used on their credit cards instead of just one, and at least one of those networks must be a network other than the Visa/Mastercard duopoly.

“In other words, after a transition period during which the Federal Reserve would write implementing regulations, the giant banks that issue the overwhelming majority of Visa and Mastercard credit cards would have to choose a second competitive network to go on each card, and then a merchant would get to choose which of those networks to use to process a transaction.”

But Beeler’s letter said the consequences of the legislation could be terrible for consumers and financial institutions across the country. She said the bill would interfere with the free market and actually push financial institutions to alternative networks. Many would likely choose China One Pay, which is built on a number of platforms owned by the Chinese government.

Beeler also suggested the bill will lead to costs for institutions that will be passed on to consumers.

“Just as Senator Durbin promised consumers more access to bank and credit union checking accounts when he first mandated those accounts be provided free of charge, the effect of the legislation he passed limited consumer choice — most remarkably in low-income areas,” she writes.

“This legislation will actually eliminate more than $68 billion in cash back and rewards programs that consumers currently rely on to pay for air travel, hotels, and hundreds of other purchases.”

And despite claims the bill will only impact the largest players in the credit industry, Beeler said credit unions will also feel the sting.

“While Senator Durbin claims this legislation is to bring down mega credit card companies, credit unions remain opposed to this legislation because it would hurt every financial institution with a contract in place currently with a credit card company as part of the level playing field of competition in our free market,” her letter states.

“That is why the Florida Credit Union Association remains opposed to this bill on behalf of our more than 7 million members, many of whom operate small business operations in the state.”