The CCCA faces another setback.
Senator Dick Durbin (D-IL) and Senator Roger Marshall (R-KS) have failed in their attempt to add the Credit Card Competition Act (CCCA) as an amendment to the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. Reportedly, the move to include the CCCA as an amendment was rejected due to concerns that its inclusion could cost votes in favor of the larger bill. The GENIUS act passed the US Senate on June 17th and was sent to the US House of Representatives.
The CCCA was first introduced in 2022, but it has failed to gain the support needed to pass as a standalone bill. A previous attempt by Durbin and Marshall to get the act passed by adding it as an amendment to the National Defense Authorization Act also failed. Despite this latest setback, Durbin and Marshall are expected to continue their efforts to get the CCCA passed into law.
The CCCA seeks to drive down merchant fees by increasing competition among US credit card networks, weakening Visa’s and Mastercard’s market dominance. It directs the Federal Reserve to issue regulations covering issuing banks with over $100 billion in assets. Under the proposed regulations, these banks will not be allowed to restrict the number of networks on which an electronic credit transaction may be processed to less than two unaffiliated networks, at least one of which cannot be one of the two largest networks. Merchants will have the right to choose the network through which their payments are processed.
Opponents of the bill assert that it will impose new costs on consumers and community banks, pose security risks and end credit card rewards programs. One of their key arguments is that retailers will not pass the proceeds of any fee reduction on to consumers. As evidence, they point to a 2014 study by the Federal Reserve Bank of Richmond which found that in response to the 2011 Durbin Amendment that capped interchange fees on debit cards, only 2% of merchants lowered their prices while 23% increased them.
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