Banking trade groups have launched a plan to attach the controversial credit card competition law to the National Defense Authorization Act (NDAA).
In a joint statement to senior House and Senate politicians, 10 financial services trade bodies argued that “Sliding the controversial credit card competition law into the NDAA would compromise the financial safety and security of our service members just to allow big-box retailers to further increase their record profits.”
The Credit Card Competition Act “undermines the financial services system by artificially capping the prices of interchange fees that merchants pay to cover the costs associated with data breaches,” said the groups.
They added that the impact of the law could undermine fraud prevention efforts, which “undoubtedly hurt consumers, including service members.”
“Congress should not be in a hurry to repeat the mistakes of the past,” the groups argued. “The NDAA should fund our essential military services and continue to protect our nation, without compromising the financial security of the military.”
The NDAA is a far-reaching bill that introduces a number of new requirements, standards, and authorities for the Department of Defense.
Trade bodies supporting the statement included the American Bankers Association and the Independent Community Bankers of America, which have previously spoken out against the credit card competition law.
They claim that by forcing the rupture of a “Visa-Mastercard duopoly” — as Congressman Lance Gooden described last month — policymakers risk undermining privacy and security, as well as enriching retailers and removing consumer benefits.
Other signatories included the Association of Military Banks of America, Bank Policy Institute, Consumer Bankers Association, Credit Union National Association, Defense Credit Union Council, Electronic Payments Coalition, National Association of Federally-Insured Credit Unions and the National Bankers Association.