The following content is sponsored by the Electronic Payments Coalition.
It’s a tale all too common in small towns across America. Small businesses once thrived on Main Street only to see giant corporate mega-stores blow into town to undercut them. Now, a new threat looms for small businesses in the form of the Durbin-Marshall credit card bill.
The bill is poised to alter the credit card routing system as we know it under the guise that it would “create competition” and financially benefit small businesses, community banks, and consumers. But the facts reveal just the opposite.
While Senators Dick Durbin (D-IL) and Roger Marshall (R-KS)’s mega-store allies would stand to gain billions, recent findings from the University of Miami paint a more bleak picture for mom and pop retailers. While the top 100 largest stores could see a benefit of nearly $3 billion, with $1.2 billion going to the top five largest retailers alone –Walmart, Amazon, Costco, Kroger and Home Depot – businesses with less than $500 million in revenue would see little or any benefit.
Despite promises of benefits, the report also found that small businesses would likely lose out on their own rewards, as small business operators receive roughly $12 billion in credit card rewards when they make purchases on credit themselves. The bill jeopardizes credit card rewards programs, essential for both businesses and consumers. By increasing costs and threatening the viability of heavily relied-on programs — such as cash back, airline points, and credit card rewards — already struggling Americans would feel an even tighter financial strain.
Many industries and groups now see this bill for what it is – harmful to consumers, to our economy, and to our communities. These individuals are trying to speak out against the legislation, only to face further threats and harm.
A recent study from Airlines for America (A4A) came out against the Durbin-Marshall bill, citing the significant harm the legislation would cause to the travel and tourism industry and the U.S. economy at large. Travel benefits like credit card rewards and loyalty points programs would be affected, disrupting many Americans’ ability to afford additional travel. Without these benefits, the travel and tourism industry would take a huge hit as well – $23 billion, to be exact.
Knowing the harm the Durbin-Marshall bill would cause to their own people, to the travel and tourism industry, and to our economic health as a whole, the airline industry has expressed its opposition to the legislation.
In response, Senators Durbin and Marshall have launched a retaliatory campaign, pressing the Transportation Department and the Consumer Financial Protection Bureau (CFPB) to monitor the airline industry’s frequent flyer and loyalty programs. Ironically, Senator Marshall chose to do so only a few years after publicly supporting the Don’t Weaponize the IRS Act.
No matter what threats Durbin and Marshall make, the facts remain. This bill will not encourage financial competition, help American consumers, or help small businesses — it will only help line the pockets of greedy corporate mega-stores even further. It’s time we put an end to this bill once and for all.
