Financial Trades Express Strong Opposition to Misguided Durbin-Marshall Credit Card Mandate Being Attached to GENIUS Act

WASHINGTON —

In a new letter sent to Majority Leader Thune, Minority Leader Schumer and the entire Senate today, the American Bankers Association, America’s Credit Unions, Association of Military Banks of America, Bank Policy Institute, Consumer Bankers Association, Defense Credit Union Council, Independent Community Bankers of America, Electronic Payments Coalition, Mid-Size Bank Coalition of America, and National Bankers Association expressed strong opposition to the Durbin-Marshall credit card mandate being attached as an amendment to the GENIUS Act or any other legislative vehicle.

“The Durbin Marshall Credit Card Mandate, a poison pill amendment that has not been properly considered through the regular legislative process, would harm consumers, small businesses, and financial institutions alike by reducing choice, increasing costs and fraud risks, and creating economic challenges for small financial institutions,” the groups wrote.

In the letter, the financial trades emphasized that government intervention in the credit card market would disadvantage small businesses, highlighting a 2024 paper by a University of Miami finance professor that found that almost all of the savings from the Durbin-Marshall bill will accrue to retailers with $500 million or more in annual sales, with little going to small businesses.

“The legislation will do nothing to help small businesses – it will only entrench corporate megastores that already have a stranglehold on the retail market,” the associations said. “Congress should not mandate the reengineering of the entire credit card payments system just to benefit a small group of the largest merchants while causing small businesses to suffer.”

Small community-based financial institutions would also suffer if the Durbin-Marshall bill is enacted, according to the groups.

“As we saw with the Durbin Amendment, interchange price controls would increase profits of corporate megastores while impairing small financial institutions’ ability to provide competitive products and services to consumers and small businesses by decreasing revenue used for lending and data security while increasing operational costs,” the groups wrote. “Federal Reserve data shows that the Durbin Amendment harmed ‘exempted’ community-based institutions. In short, their work is far too essential in supporting small businesses to jeopardize by substituting government price-setting in place of dynamic market competition.”

In the letter, the groups noted that interchange fees help to fund various cardholder benefits, including rewards programs, and investments in critical security tools. Reducing these fees through mandated routing would diminish or eliminate such programs, which American consumers value and similarly oppose the federal government reaching into their wallets. The groups noted that a reduction in rewards and cash back opportunities would significantly harm minority and lower-income consumers, pointing to a study from the International Center for Law and Economics that found that 77% of cardholders with a household income of less than $50,000 have an active rewards card. 

“Despite false claims to the contrary, the bill would take away rewards options from lower-income Americans who value those rewards benefits, not just wealthy individuals,” the groups wrote.

The associations concluded their letter by emphasizing that the Durbin-Marshall bill puts our seamless and secure credit card system in jeopardy. According to a study from Texas A&M University, enactment of the bill could—based on 2021 card activity—double the amount of fraud to $20 billion over the next decade.

“The payment card system is convenient, secure, and hassle-free. It protects consumers against fraud, guarantees businesses receive timely payments, funds reward programs like cash back, and powers the American economy, from brick-and-mortar establishments to innovative e-commerce platforms 24 hours a day, seven days a week, 365 days a year,” they said. “The Durbin Marshall Credit Card Mandate, and any other legislation that intervenes in the credit card market, puts the seamlessness, security and value of consumer electronic payments in jeopardy.”

Read the full letter.

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About the American Bankers Association

The American Bankers Association is the voice of the nation’s $24.1 trillion banking industry, which is composed of small, regional and large banks that together employ approximately 2.1 million people, safeguard $19.2 trillion in deposits and extend $12.7 trillion in loans.

About America's Credit Unions

America's Credit Unions is the unified voice for not-for-profit credit unions and their more than 140 million members nationwide. America's Credit Unions provides strong advocacy, resources and services to protect, empower and advance credit unions and the people and communities they serve. For more information about America's Credit Unions, visit AmericasCreditUnions.org.

About the Association of Military Banks of America

The Association of Military Banks of America (AMBA) was founded in 1959. AMBA is a not-for-profit association of banks operating on military installations, banks not located on military installations but serving military customers, and military banking facilities designated by the U.S. Treasury. The association's membership includes both community banks and large multinational financial institutions, all of which are insured by the Federal Deposit Insurance Corporation.

About Bank Policy Institute

The Bank Policy Institute is a nonpartisan public policy, research and advocacy group that represents universal banks, regional banks and the major foreign banks doing business in the United States. The Institute produces academic research and analysis on regulatory and monetary policy topics, analyzes and comments on proposed regulations, and represents the financial services industry with respect to cybersecurity, fraud, and other information security issues.

About Defense Credit Union Council

The Defense Credit Union Council is the trusted resource for credit unions on all military and veteran matters. By maintaining a close and constant liaison with the Pentagon, Capitol Hill, and NCUA, the Council champions the interests of credit unions serving our military and veteran communities by coordinating policy, procedures, and legislation impacting morale and welfare, financial readiness, and the delivery of quality financial products and services. Organized in 1963, the Council’s membership is comprised of more than 180 credit unions with over 40 million members. If you would like more information about this topic, please contact DCUC at [email protected].

About the Consumer Bankers Association

The Consumer Bankers Association represents America’s leading retail banks. We promote policies to create a stronger industry and economy. Established in 1919, CBA’s corporate member institutions account for 1.7 million jobs in America, extend roughly $4 trillion in consumer loans and provide $275 billion in small business loans annually. Follow us on Twitter @consumerbankers.

About the Electronic Payments Coalition

We are the credit unions, community banks, payment card networks, and institutions who support the backbone of our economic system: electronic payments. Learn more at electronicpaymentscoalition.org.

About the Independent Community Bankers of America

The Independent Community Bankers of America® has one mission: to create and promote an environment where community banks flourish. We power the potential of the nation’s community banks through effective advocacy, education, and innovation. As local and trusted sources of credit, America’s community banks leverage their relationship-based business model and innovative offerings to channel deposits into the neighborhoods they serve, creating jobs, fostering economic prosperity, and fueling their customers’ financial goals and dreams. For more information, visit ICBA’s website at icba.org.

About the Mid-Size Bank Coalition of America

Founded in 2010, the MBCA is a distinct and singularly focused "self-help" community for America's mid-size banks. The MBCA provides a forum to facilitate the utilization of information, market developments and best practices tailored toward mid-size banks. Our entrepreneurial culture also allows for consortium opportunities to share research and explore commercial ventures, resulting in a more resilient and competitive banking landscape that helps reduce the cost of banking services to consumers.

About National Bankers Association

Founded in 1927, the National Bankers Association is the voice for the nation's Minority Depository Institutions (MDIs). No other trade association is focused solely on the priorities, federal advocacy, and representation of minority-owned and -operated banks. Members include Black, Hispanic, Asian, Pacific Islander, Native American, and women-owned and -operated banks. MDIs are located across 32 states and the District of Columbia, Puerto Rico, and Guam. For more information, visit nationalbankers.org.