Executive Letter: Federal Interchange Legislation
By Rose Oswald Poels
This spring, the Wisconsin Bankers Association (WBA) took two groups of bankers out to Washington, D.C. for our annual legislative lobbying trips in conjunction with the American Bankers Association (ABA) and Independent Community Bankers of America (ICBA) in March and May respectively. The timing of both trips was positive for many reasons, including the ability to weigh in early on various legislative issues since the 118th Congress only first began in January.
One of the issues we lobbied on relates to interchange fee revenue banks receive as part of the payment process. The retail/merchant businesses are back again this Congress (and in Wisconsin as well) lobbying very hard for the re-introduction of the “Credit Card Competition Act (CCCA),” which was introduced last session by Senators Roger Marshall (KS) and Dick Durbin (IL). Proponents of this legislation claim that it will increase competition in the credit card marketplace when, in fact, it will reduce the number of credit card issuers competing for consumers’ business, remove the competitive differences among card products, negatively affect card rewards programs, and put the nation’s private-sector payments system under the micromanagement of the Federal Reserve Board. Among the many arguments we raised included the fact that, according to the Federal Reserve Bank of Richmond, after the Durbin Amendment was implemented, 98.8% of merchants failed to pass through savings realized from debit regulation to consumers, and over 20% increased prices.
When we were in Washington earlier this month, we learned that many Wisconsin businesses, notably Kwik Trip, have been communicating with our entire delegation putting pressure on them to co-sponsor or even introduce the CCCA this session. With Kwik Trip headquartered in his district, newly elected Rep. Derrick Van Orden, in particular, has received a lot of pressure to be a lead sponsor in the House on this bill. Thanks to several constituent bankers who joined me in Washington earlier this month, as of now, Rep. Van Orden is not agreeing to be the lead sponsor or even a co-sponsor. This is a very significant achievement because prior to our visit that week, all indications were that he was going to be a lead sponsor. If it were not for the active grassroots involvement of these bankers on this trip echoing WBA’s (and national trade groups’) messages and communicating the specific harm that will occur to their institutions if this legislation were to pass, I’m not sure Rep. Van Orden would have made the decision he currently has taken.
If you are ever wondering whether your voice makes a difference, this very recent situation should illustrate that it does. It will be imperative for everyone to keep up active grassroots lobbying on this issue with our entire delegation as we meet with them later this summer in-district or see them at other events. For those of you who are in Rep. Van Orden’s district, please thank him next time you see him (or send a message to his office) for staying off the CCCA for now. WBA is closely watching any movement on this issue nationally in case more widespread formal grassroots action is needed. Continue to watch for information on this and other advocacy issues from WBA and know that when we request your involvement, it is needed and it really does matter!
