CUs Continue Opposition Lobbying as Interchange House Bill Introduced

Credit union groups maintained fierce lobbying against legislation that would expand the credit card processing system as a new House bill was introduced.

David Baumann


Sep 20



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David Baumann

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David Baumann

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Credit union groups maintained their firm opposition to legislation that would expand the credit card processing system.

Even as credit unions continue intense lobbying against a Senate bill designed to expand the credit card processing system, two House members introduced companion legislation in the House.

Reps. Peter Welch, D-Vt., and Lance Gooden, R-Tex., introduced H.R. 8874, legislation that would require the Federal Reserve to issue rules that would ensure banks that currently use the four-party card processing system be required to use at least one affiliated network in addition to Visa and Mastercard.

Sens. Richard Durbin, D-Ill., and Roger Marshall, R-Ks., introduced the Senate version, S. 4674, at the end of July. Since then, financial trade groups, including NAFCU, CUNA, state credit union leagues and banking trade groups have expressed vehement opposition to the measure.

Rationale Behind the Bill

It is unclear whether such controversial legislation can be passed before or even after the midterm elections.

But that did not deter Welch and Gooden.

“In a well-functioning market there is competition and choice,” Welch said. “That does not exist in our current credit card network market.”

Gooden added, “Our free-market economy cannot exist without healthy competition, and I am proud to introduce legislation to fulfill my pledge to protect small businesses and ensure these companies can no longer use their monopolistic power to crush their competition.”

Response from CUNA and NAFCU

Credit union trade group officials were just as outspoken about the harm they see the measure causing.

“This bill would break a system that we know works, and put consumers’ sensitive financial data at risk, just to give big box retailers yet another windfall,” said CUNA President/CEO Jim Nussle, following the introduction of the House bill.

NAFCU President/CEO B. Dan Berger struck a similar note, stating, “The House version of the Credit Card Competition Act will fail consumers at a time when financial well-being is of the utmost importance.”

Credit union trade groups also are visiting congressional offices to lobby against the bill.

NAFCU Senior Vice President of Government Affairs Greg Mesack recently held a briefing with more than 50 congressional and Federal Reserve staff members attending.

Additionally, NAFCU member credit unions visited House and Senate offices during the trade group’s recent congressional caucus.

League Lobbying Efforts

State credit union leagues are also continuing their own “Hike the Hill” efforts.

This week, the CrossState Credit Union Association is in Washington lobbying against the bill and on other issues. CrossState represents credit unions in Pennsylvania and New Jersey.

“With the pandemic, it’s been a couple of years since we’ve been here,” Patrick Conway, the association’s president and CEO explained, in an interview.

Conway noted that credit union officials from the two states met with regulatory agency officials, including CFPB Director Rohit Chopra and NCUA officials, on Monday. The focus, he said, was lobbying the agencies for less burdensome regulations.

CrossState logo

On Tuesday, the credit union officials had about 20 meetings scheduled on Capitol Hill. They will voice their opposition to the interchange bill and their support for legislation to allow all credit unions to add underserved areas to their fields of membership.

For the past couple of years, those meetings were held virtually. For much of that time, Capitol Hill was closed to visitors.

Now, the meetings again can be held in person.

“Both methods of advocacy have been effective,” Conway said. But, he added, “There’s nothing like being in person.”

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