Opposition Grows Against the Credit Card Competition Act

Credit unions and their advocates have spent months raising concerns with lawmakers about the Credit Card Competition Act (CCCA). These objections have, so far, been heeded. However, the financial sector remains vigilant, fearing that congressional lawmakers might attempt to insert this controversial legislation into upcoming bills, including those related to disaster relief.

On Friday, officials from various financial organizations sent letters to congressional leaders in both the House and Senate, expressing strong opposition to including the CCCA in any pending legislation.

Critics of the CCCA warn of severe consequences for financial institutions and their customers. They argue that while the intent of the CCCA may be to encourage competition, its unintended consequences could significantly disrupt financial services, weaken consumer protections, and ultimately harm the financial well-being of many Americans.

Opponents also caution that the CCCA would undermine the robust consumer protections that financial institutions have long provided. They note that the legislation could lead to increased fraud, diminished security, and a weakening of protections that consumers rely on.

Previous versions of the CCCA, supported by retailers, would require the Federal Reserve to issue regulations ensuring that large financial institutions cannot 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 must be outside of the top two largest networks, Visa and Mastercard.

Critics further caution that including the CCCA in broader legislation, such as disaster relief bills, would be detrimental to financial institutions and their customers. They argue that it is unwise to make such a significant change to the American financial system without the bill following the regular legislative process.

Combining such a policy with crucial funding measures could have devastating consequences for many Americans at a time when they need greater financial stability and support. Congress is not scheduled to return to Washington, D.C. until after the November election.