Dear Senators Roger Marshall and Jerry Moran,
We urge you to oppose Congress’s new Credit Card Competition Act (CCCA) that would destroy credit card rewards programs for working families and reward retail conglomerates while devastating small business owners in our state.
This egregious cash-grab is being heralded as a way to reduce “interchange fees” for credit card users but in reality, this bill will strip away billions of dollars in cash back and loyalty rewards programs Kansans rely on to afford groceries, back-to-school supplies, and other necessities.
The Credit Card Competition Act claims to reduce fees for consumers by capping swipe fees for credit card purchases, but the bill ends up helping big retailers while consumers pay the price.
The CCCA pads the pockets of big-box retailers like Target and Walmart by allowing them to process credit card swipe fees in the cheapest way for them, but in return credit card companies will simply eliminate billions in rewards for consumers to make up the lost revenue.
After Sen. Durbin’s misguided 2010 attempt to cap debit card fees under the “Durbin Amendment”, it was retail conglomerates who benefited from the slashed fees. Retailers paid lip service to cutting prices for consumers, but a study from the Federal Reserve Bank of Richmond showed three-quarters of retailers didn’t lower prices as they promised.
The “Durbin Amendment” is responsible for as much as $145 billion dollars being diverted into the pockets of retailers since 2011 while working families paid higher prices for necessities according to the Electronic Payments Coalition.
When interchange fees are capped, credit card companies do not have wiggle room to continue offering consumers cash back and rewards programs, as evidenced by how regulation has destroyed rewards programs in other countries.
An interchange cap in Australia led to a loss of 800 million dollars in rewards for consumers, while a Canadian effort to reduce interchange fees resulted in 1.5 billion dollars in lost rewards. In the EU, financial institutions have suspected rewards and cash back programs all together due to interchange regulation.
In the U.S., major credit card companies returned close to $60 billion dollars in cash back and rewards to working families in 2020 but the bulk of those rewards will disappear if the Credit Card Competition Act is passed.
We ask that you do your duty for hardworking Kansans and oppose the Credit Card Competition Act, as it unfairly targets working families by eliminating much-needed cash back and rewards programs.
Sincerely, the undersigned.