The Kansas Bankers Association is joining a nearly $1 million ad campaign against a credit card bill sponsored by Democrat Senator Dick Durbin and Kansas’ own Republican Senator Roger Marshall.
The Durbin-Marshall “Credit Card Competition Act” aims to lower card swipe fees for merchants by requiring the largest U.S. banks — those with over $100 billion in assets — to enable at least two network options on their credit cards, including at least one non-Visa/Mastercard network.
Washington is also contemplating a 10% cap on credit card interest rates.
According to the Sunflower State Journal, Republican U.S. Sen. Josh Hawley and Independent U.S. Sen. Bernie Sanders introduced a bill limiting the annual percentage rate for credit cards to no more than 10%.
KBA said in a release that such a cap would prevent many Kansans with poor credit from being able to access cards.
“A government-imposed interest rate price cap of 10% would eliminate credit card access for millions of Americans and thousands of Kansans,” KBA President and CEO Doug Wareham said in a release. “While mandating an interest rate ceiling on credit cards might sound appealing to some, the fact is implementing this type of price control will not benefit most consumers but will in turn devastate families and small businesses that rely upon and value having access to the benefits of a credit card. Simply put, the implementation of government price controls will force banks to tighten their credit card lending standards and severely limit consumer access to the safe and reliable credit cards we all rely upon in our everyday lives.”
Vance Ginn, a senior fellow with the Kansas Policy Institute — which owns The Sentinel — agreed.
“A 10% cap on credit card interest rates is a price control that will reduce access to credit for higher-risk borrowers while favoring those with stronger credit,” Ginn said. “When government suppresses risk-based pricing, lenders tighten standards and pull back — hurting the very people the policy claims to help. The real fix for affordability is less government spending, less regulation, lower taxes, and stable dollar, not price controls.”
Wareham said KBA is also opposed to the Durbin-Marshall bill.
“KBA also encourages Congress to once again reject the so-called Credit Card Competition Act (CCCA), which was recently reintroduced by Senator Richard Durbin (D-Illinois) and Senator Roger Marshall, (R-Kansas),” Wareham said. “The CCCA is more big-government interference with our free market system in the form of a credit card routing mandate being championed by large corporate retailers and merchants that want to control who processes your credit card.
“This mandate, commonly known as the Durbin-Marshall Amendment, is another misguided proposal that will leave consumers and small business owners with fewer options and few financial benefits from their credit cards. The Durbin-Marshall Amendment would weaken credit card security, devastate credit card reward programs and remove the consumer’s choice regarding what credit card network processes their credit card payments. KBA strongly encourages Congress to oppose government interference in the credit card marketplace.”
KBA is partnering with the Electronic Payments Coalition — to the tune of about $250,000 — to oppose the legislation.
Indeed, according to EPC, a new study found the Durbin-Marshall bill could cost the U.S. Economy $227 billion and as many as 156,000 jobs.
“This new study proves the Durbin-Marshall bill is a jobs killer,” Richard Hunt, Executive Chairman of the Electronic Payments Coalition said. “The U.S. economy cannot afford a quarter-trillion dollar hit and workers in cities across the country should not have to suffer so corporate megastores can pad their profits. Make no mistake, this bill would create a completely avoidable downturn in local communities. It is anti-growth and dangerous economic policy.”
Bill would have similar downstream effects to the previous rule capping overdraft fees
In December of 2024, in the 11th hour before a new administration would take office, the Consumer Financial Protection Bureau — which the Trump administration is currently trying to shutter — passed a “final rule,” which would apply only to “Very Large Financial Institutions,” i.e.; those with total assets over $10 billion, that would cap overdraft fees to “actual costs and losses.”
According to James Erwin of Americans for Tax Reform, the rule ultimately overturned by Congress would have only raised consumer costs.
“That would mean people would not be able to get these sort of emergency funds when they’re in a tight spot to make rent,” Erwin said. “I mean, frankly, this you could see an increase in homelessness as a result, if people are not able to overdraw their accounts to pay the rent if they’re in a tough situation, if they lost their job, or they need to scramble to make ends meet at any point. Having the option of an overdraft when you’re in dire straits is helpful but, you know, there’s a fee for that, and rightfully so.”
