The failed Credit Card Competition Act threatened to eliminate your credit card rewards and expose your sensitive data, all while pretending to help consumers save money.
Key Takeaways
- The Credit Card Competition Act (CCCA), championed by Senators Dick Durbin and Roger Marshall, failed to pass after being rejected as an amendment to the GENIUS Act due to significant public pressure.
- Similar legislation on debit cards in 2010 resulted in the near-disappearance of debit card rewards and did not deliver the promised consumer savings.
- The CCCA could have resulted in an estimated $227 billion in lost economic activity, 156,000 lost jobs, and weakened data security for consumers.
- The U.S. credit card market is already highly competitive with 152 companies issuing cards and experiencing 8.1% growth from 2020 to 2025.
- A wide coalition of labor unions, small businesses, financial institutions, and consumer advocates successfully opposed the legislation.
Another Failed Attempt at Government Price Controls
Senate Democrats led by Dick Durbin, along with Republican Roger Marshall, recently attempted to add the Credit Card Competition Act (CCCA) as an amendment to the bipartisan GENIUS Act, which aims to regulate cryptocurrency markets. This backdoor approach failed when key senators withdrew support for the combined legislation, marking another defeat for the CCCA which has been repeatedly rejected since its introduction in 2022. The bill’s core proposal would have forced banks to offer merchants multiple payment networks for processing credit card transactions, excluding the two largest networks, Visa and Mastercard.
“This bill has never been through a relevant committee, never been debated, and was never even reintroduced this Congress,” said Richard Hunt, CEO of the Electronic Payments Coalition.
Several senators openly opposed the CCCA amendment, including Senator Thom Tillis who stated clearly: “If it were to be adopted in GENIUS, I would withdraw my support on the Senate floor.” This opposition from both sides of the aisle demonstrates how controversial the legislation has become, as lawmakers recognize the potential negative impacts on consumers who have come to rely on credit card rewards for everything from family vacations to everyday purchases.
Learning From Past Mistakes
The CCCA bears striking similarities to the Durbin Amendment of the 2010 Dodd-Frank Act, which imposed similar restrictions on debit card processing. That legislation promised lower prices for consumers but delivered quite different results. Most debit card rewards programs disappeared entirely, while retailers pocketed the savings rather than passing them along to consumers through lower prices. Banks, forced to recover lost revenue, implemented new fees and eliminated free checking accounts for millions of Americans.
“Debit-card rewards programs have nearly disappeared since the Durbin amendment, part of the 2010 Dodd-Frank law that cut retailers’ fees nearly in half. Stores didn’t pass the savings to customers, while the banks that issue the cards found other ways to recoup revenue,” reported the Wall Street Journal.
Similar regulations in Australia and the United Kingdom produced nearly identical results, with consumers losing valuable rewards while gaining nothing in return. Credit card annual fees increased, rewards decreased, and retailers kept the savings. The evidence from these previous regulatory interventions makes it clear that the CCCA would likely harm the very consumers it claims to help, while primarily benefiting large retailers who would pay lower processing fees.
Economic and Security Risks
Beyond the obvious impact on rewards programs, the CCCA posed serious security and economic risks. Payment processing involves sensitive consumer data, and the current major networks have invested billions in security infrastructure. Forcing merchants to use alternative networks with potentially weaker security protections could have exposed consumers to increased fraud risk. Additionally, economic studies suggested the legislation would have significant negative impacts on the broader economy.
“This bill would allow these large merchants to use the cheapest credit card processing option, with no requirement to keep consumers’ data safe or return savings back to them,” warned Jim Nussle, President and CEO of the Credit Union National Association.
A University of Miami study concluded that the CCCA would disproportionately harm community banks and credit unions, which serve rural and low-income communities. These smaller financial institutions rely on interchange fee revenue to provide affordable banking services. The study also projected that the bill could result in approximately $227 billion in lost economic activity and eliminate 156,000 jobs across the economy. In an era of continuing inflation challenges, this legislation would have further squeezed American families.
A Solution Without a Problem
Proponents of the CCCA argued that the credit card market lacks competition, but the facts suggest otherwise. The United States currently has 152 different companies issuing credit cards, with the market growing at a healthy rate of 8.1% between 2020 and 2025. Consumers can choose from hundreds of different card options with varying rewards structures, interest rates, and benefits. This robust competition has driven innovation in the industry and provided consumers with increasingly valuable rewards and benefits.
“Credit card swipe fees inflate the prices that consumers pay for groceries and gas,” claimed Senator Dick Durbin, despite evidence from the debit card regulations that retailers rarely pass these savings to consumers. Meanwhile, Richard Hunt of the Electronic Payments Coalition cut to the heart of the matter, saying: “This is a political favor to [the bill’s] supporters’ largest campaign donors.”
For now, American consumers can breathe a sigh of relief that their credit card rewards remain safe. However, supporters of the legislation have vowed to continue pushing for its passage. Consumers who value their credit card rewards should remain vigilant and continue to make their voices heard with their representatives in Washington. The defeat of the CCCA represents a victory for consumer choice and market competition over government price controls and special interest legislation.
