[Congressional Record Volume 169, Number 202 (Thursday, December 7, 2023)]
[Senate]
[Pages S5843-S5844]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  CREDIT CARD COMPETITION ACT OF 2023

  Mr. DURBIN. Mr. President, on a different subject matter completely, 
I want to explain a bill that I have introduced that is so 
controversial that when you go to the airport here in Washington, DC, 
they have billboards flashing about how dangerous this bill is. Let me 
tell you about the bill.
  Most Americans pay for their purchases with credit and debit cards. I 
know I do. However, most Americans don't know that, when they go to the 
register to pay or to enter their card information online, there are 
fees that are being charged when they use their credit cards that are 
known as swipe fees, or interchange fees. Each time a credit card is 
used to make a donation to the Red Cross, to purchase groceries, fuel, 
Christmas gifts, or something else, Visa and MasterCard charge a fee 
you never see. Some of that fee they keep for themselves; most is given 
to the bank that issues the credit card.

  Today, Visa and MasterCard control around 80 percent of the credit 
card market in the United States of America--two companies, a duopoly--
wielding enormous power over the American economy. Visa and MasterCard 
set these interchange fees, or swipe fees, on behalf of thousands of 
banks, leaving merchants, retailers--many of them just small businesses 
and restaurants--without a choice but to accept the outrageous fees. 
There is no negotiation on this fee. There is no competition. Small 
business owners and consumers face a ``take it or leave it'' choice. In 
2022 alone, U.S. merchants and consumers paid $93.2 billion in credit 
card interchange fees to line the pockets of the biggest banks on Wall 
Street. That is absolutely unacceptable and unfair, and we can and must 
do something about it.
  That is why I made it a priority to pass my bipartisan Credit Card 
Competition Act. The legislation, which I introduced with Senators 
Marshall, Welch, and Vance, would finally bring competition and choice 
to the credit card market and bring down the excessive credit card fees 
by requiring only the largest 30 banks in this country to enable at 
least two credit card networks to be used on the credit cards they 
issue. It would be provided with at least one network outside the Visa-
MasterCard duopoly. My bill is estimated to save merchants, retailers, 
businesses, and consumers $15 billion every year.
  Given this threat to their ability to exorbitantly profit off of 
consumers and small businesses, it is no surprise that the credit card 
industry is paying a pretty penny to convince consumers that my bill 
will take away the credit card rewards programs, like frequent flier 
miles. In fact, a new report found that Visa, MasterCard, Wall Street, 
and the industry trade groups they fund, such as the Electronic 
Payments Coalition, have spent a combined $51 million in lobbying 
against my bill since 2022.
  They also have recruited allies, including some in the airline 
industry, to breathlessly claim that my bill would make frequent flier 
rewards programs disappear. United Airlines' CEO Scott Kirby recently 
said that my bill would ``kill the rewards program.''
  Let me be very clear: That is a patently false statement. A recent 
study found that if my bill were enacted, it would have a negligible 
impact, at most, on rewards and noted that banks' swipe fees profits 
provide a more than sufficient margin to maintain a current reward 
level.
  What I have come to find out and what most people would be surprised 
to hear--and United Airlines is a good example--is that we think of it 
as an airline that also has credit cards, but when you look at the 
profit statement for United Airlines, it turns out it is a credit card 
company that happens to own some airplanes. That is a fact. More 
profits are made by United Airlines off their credit card than their 
flight operations. Think about that for a second. All the planes and 
all the schedules and all the people who work don't generate the same 
level of profit as their credit cards from these interchange fees.
  So you say to yourself: Well, the credit card companies that are 
offering all of these special programs, if they make less money, they 
will provide fewer programs.
  Well, let's take a look across the pond at Europe for comparison.
  In 2015, the European Union capped credit interchange fees at 0.3 
percent compared to the U.S.'s rates for United Airlines and others--a 
U.S. rate between 2 to 3 percent. Compare that 2 to 3 percent to 0.3 
percent, and you say to yourself: Well, surely, they don't offer the 
frequent flier programs in Europe if they have so dramatically cut this 
interchange fee. But major European airlines still offer co-branded 
credit cards and frequent flier programs that are comparable to, if not 
better than, anything offered in the United States.
  Moreover, this past July, Forbes magazine published an article saying 
that compared to other nations, the airline rewards program in the 
United States has made it more challenging to earn and redeem miles. I 
am going to be taking a look at these frequent flier programs now that 
United Airlines wants to make such a to-do about it. I think we have 
got to make sure that the American consumers are getting what they 
think they are getting.
  So let me repeat: My bill is not coming after your airline rewards 
programs or any other program, and any effort by the airline industry 
or big banks to convince you otherwise is just a scare tactic. They are 
feigning concern for hard-working Americans to protect their bottom 
line.
  Since I introduced the bill, those who oppose it have falsely claimed 
the legislation would hurt unions and benefit billionaires. What a 
claim. Just a few weeks ago, multiple unions, including the 
International Brotherhood of Teamsters and the Service Employees 
International Union, endorsed my Credit Card Competition bill.

[[Page S5844]]

  The Teamsters' general president, Sean O'Brien, said:

       Union members and American families cannot afford to 
     sacrifice so much of their hard-earned wages to predatory and 
     consolidated credit card corporations trying to skim every 
     last dollar they can from vulnerable consumers.

  That is exactly the problem this legislation was introduced to fix.
  And just before Thanksgiving, a diverse group of organizations 
representing workers, small businesses, and competition advocates 
launched the Lower Credit Card Fees Coalition, urging Congress to pass 
my Credit Card Competition Act.
  Few things could unite unions, businesses, consumer groups, and a 
bipartisan group of Senators. This bill does just that because it will 
benefit hard-working Americans.
  Far from threatening rewards programs or hurting workers, the bill 
will benefit Americans who currently are paying the price for the 
credit card industry's price-gouging schemes. It will give a fighting 
chance to small businesses and restaurants that we want to see stay 
open; support the mom-and-pop shops that make our communities feel 
whole; and, ultimately, keep money in the pockets of hard-working 
Americans. It is time we bring this commonsense, consumer-protecting 
bipartisan legislation to the floor for a vote.

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