Consumer advocacy groups are sounding the alarm about a new bill brought by Senator Dick Durbin (D-IL) called the “Credit Card Competition Act," which many fear will lead to more financial fraud.
One group, the Electronic Payments Coalition sounded the alarm saying that the new legislation will "give the Federal Reserve the power to control how payments on credit cards are routed."
They then went on to explain how this will negatively impact the lives of millions of Americans who use credit cards and electronic payments.
They stated, "These new routing mandates on credit cards will shift billions in consumer spending to higher-risk payment networks. Doing so will weaken America’s payment system and put everyday consumers like you at significant risk of fraud. This is because your personal and financial data will be run over foreign, less secure networks."
Financial fraud is already a massive issue that costs Americans in both money and stability and Senator Durbin is intent on making the problem worse.
Why is Senator Durbin pushing a new bill that will increase financial fraud? The answer lies with massive retailers like Walmart, Target, and Amazon who stand to make millions by outsourcing payment processing to less secure handlers.
These retailers are undoubtedly pouring large sums of money into advocating for this action and no doubt Durbin himself stands to gain from this.
The EPC pointed out, "Cheaper networks offer little or no credit card rewards and have not invested in 21st-century fraud prevention. But big-box stores know they won’t be on the hook if fraud occurs. Your bank or credit union has guaranteed payment to the retailer, and it’s these financial institutions that will be hurt when fraud skyrockets further."
Americans stand to lose in every way as this new legislation not only exposes consumers to fraud, it will also hurt smaller credit unions.
The EPC stated, "By effectively capping them [Interchange fees], Congress would put big retailers’ profits before Americans’ financial security. Big-box stores will profit while credit unions and other banks will have a harder time offering low-cost checking, loans to the community, and more."
This situation is another stark reminder that many of our legislators are not serving regular Americans. Instead, Senators like Dick Durbin are serving the interest of big businesses at the expense of regular consumers.
Right now the Credit Card Competition Act has bipartisan support as it was brought forward by Durbin and supported by Senator's Roger Marshall, (R-KS) and Peter Welch (D-VT).
The bipartisan nature of this bill certainly increases the chances of this bill being passed.
However, considering the stark division in Congress combined with the other issues being debated, there is a good chance that there is simply no time to vote on the Credit Card Competition Act which is great news for Americans.
