Commentary: Don’t Let Democrats in Washington Mess with Your Credit Card

by Kenneth Eaton


As President Biden and Democrats in Washington debate trillions of dollars in new government spending, Tennesseans would be wise to hang onto their wallets. And now thanks to a new proposal being discussed by Sen. Dick Durbin (D-IL) and other progressives like Sen. Bernie Sanders (I-VT), Tennesseans would be wise to hold onto their credit cards too.

This new plan would impose new regulations on credit cards and make it harder for Tennesseans to access banking and financial services. This so-called progressive priority would also represent one of the largest and most expensive regulations in American history.

Durbin and his progressive allies are proposing an expansion of big government price controls on credit cards. As usual with liberal policies, this is being championed as a way to help working-class Americans but would actually leave them with fewer options and higher costs. The regulations would place new and arbitrary caps on fees that retailers pay as part of credit card transactions, thus making it more difficult for banks to ensure security and financial inclusion in the marketplace.

For example, banks that issue credit cards are typically on the hook for fraudulent credit card purchases, providing merchants and customers with a degree of protection. But with smaller financial cushions, banks are going to have to limit their credit exposure. For consumers, this likely means the elimination of “no fee” credit cards that many families rely on.

The average consumer receives nearly $170 annually in credit card rewards, but these benefits will likely fall by the wayside. Government price controls and new routing regulations would also lead to the decline or elimination of the credit card rewards that many Americans currently enjoy.

For those who don’t believe this could happen to their credit cards, they should know that this has already happened to their debit cards. Ten years ago, Senator Durbin was behind a law that imposed government caps on debit cards. The result, as expected, was bad for consumers.

The Durbin debit card policy led to a 35 percent decline in the availability of free checking accounts at the banks targeted by the policy. A Boston University study found that Durbin’s law cost low-income consumers $160 per year, and increased the number of Americans without a bank account by nearly a million.

Not only is the Durbin proposal costly for American consumers, but it would also make their financial information less secure. Part of the regulation includes language that would require merchants to link with at least two unaffiliated network providers to process credit card transactions. It is unclear how this change would benefit Americans, but it is clear who it would benefit – communist China.

The Chinese government has been working tirelessly to extend its reach into the global electronic payment market, which could allow them to collect data on Americans. The proposal would practically open the front door for them. Instead of your bank processing transactions on your card, it could be Chinese companies that share your purchase data and personal information with the government.

Tennessee’s native son Davy Crockett famously said, “Be sure you are right, then go ahead.” Democrats in Washington are dead wrong, but going ahead anyway. Fortunately, Tennessee common sense still exists in Washington in the form of Senators Marsha Blackburn and Bill Hagerty, who have a long history of standing strong for Tennessee consumers and supporting commonsense conservative policy priorities. Hopefully, they will fight for the ability of Tennesseans to access credit cards and financial services and reject any proposals that could jeopardize the security of our financial transactions.

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Kenneth Eaton is a resident of Williamson County, Tennessee.





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