Lummis, Moreno Join Credit Card Competition Act As Interchange Threat Grows / THE feature / CUToday.info

WASHINGTON—Two influential Republican senators have signed on to the Credit Card Competition Act, giving new momentum to legislation fiercely opposed by credit unions and potentially turning a dispute over cryptocurrency legislation into a renewed battle over interchange fees.

Sens. Cynthia Lummis (R-WY) and Bernie Moreno (R-OH) have agreed to cosponsor S. 3623, according to financial services reporter Brendan Pedersen and an Aug. 7 Senate cosponsorship filing cited by the Defense Credit Union Council. The filing, submitted by Sen. Roger Marshall (R-KS), the bill’s lead sponsor, requests that the two senators be added as cosponsors.

It was later reported that Angus King (I-ME) is also co-sponsoring CCCA.

The development is particularly significant because Lummis and Moreno have been deeply involved in negotiations over cryptocurrency market structure legislation. Pedersen reported their decision to back the Credit Card Competition Act was driven by frustration with the banking industry’s role in delaying the Clarity Act and the political problems the dispute has created within the Republican conference. Neither senator had publicly confirmed that motivation as of Friday evening.

The crypto negotiations have become increasingly contentious. Earlier this year, Moreno criticized banking industry objections involving stablecoin rewards while Lummis pushed to move market structure legislation forward. The Block reported that both senators were also directly involved in negotiations with President Trump over an ethics provision that had been one of the remaining obstacles to advancing crypto legislation.

For credit unions, the result could be the revival of one of the industry’s most closely watched legislative threats. DCUC Chief Advocacy Officer Jason Stverak said the addition of Lummis and Moreno increases the likelihood that supporters will try to advance the Credit Card Competition Act as an amendment to another bill or use it as leverage in broader financial-services negotiations.

“The legislative threat level surrounding the CCCA has increased,” DCUC said, adding that credit unions should expect renewed congressional attention to interchange policy through the remainder of the year.

Introduced in January by Marshall with Sens. Dick Durbin (D-IL) and Peter Welch (D-VT), S. 3623 would require credit-card issuers with more than $100 billion in assets to enable transactions to be routed over at least two unaffiliated payment networks, including at least one network other than Visa or Mastercard. The legislation has been referred to the Senate Banking Committee and has not received a committee vote.

Supporters contend the legislation would inject competition into a market dominated by Visa and Mastercard and reduce the swipe fees paid by merchants. A summary released by Welch’s office says Visa and Mastercard control more than 80% of the U.S. credit card network market and that the legislation would directly apply only to roughly the 30 largest card-issuing financial institutions.

Credit unions and other financial institutions have argued that the impact would extend well beyond institutions directly covered by the $100-billion threshold, potentially reducing interchange revenue that supports rewards programs, fraud prevention, cybersecurity and other card services. DCUC said the latest development illustrates a risk it has previously warned about: that disputes involving digital assets policy could spill into payments legislation and pull credit unions into a political fight involving banks.

“Credit unions cannot allow themselves to become collateral damage in a political dispute,” said DCUC Chief Advocacy Officer Jason Stverak. “Credit unions did not create the current disagreement over digital asset legislation, and military families should not pay the price through legislation that would weaken fraud prevention, cybersecurity investments, payment innovation, and member services.”

The Credit Card Competition Act has repeatedly failed to advance in previous Congresses, but the addition of Lummis and Moreno gives Marshall and Durbin two more Republican supporters at a time when supporters could seek opportunities to attach the measure to other must-pass legislation. DCUC said it is monitoring additional cosponsors, committee activity and potential amendment vehicles and is engaging congressional offices and coalition partners.

“The decision by Senators Cynthia Lummis and Bernie Moreno to join the Credit Card Competition Act is a significant development that every credit union leader should take seriously,” Stverak said. “DCUC has been warning that conflict surrounding the Clarity Act and digital-asset policy could spill into the interchange debate and breathe new life into the Marshall-Durbin proposal. Tonight, that risk appears to have become reality.”

Washington credit union advocate John McKechnie said credit unions have always understood that CCCA has been “dormant but not deceased. This latest flurry of activity proves that, and it proves that we should be ready to roll up our grassroots sleeves and get busy in the final few weeks of this Congress. Things could get very dicey.”  

Political frustration is not a sound basis for rewriting the nation’s credit-card payments system, Stverak noted.

“If these cosponsorships are intended as a response to frustration with the banking industry over an unrelated digital-asset bill, then credit unions, military families, veterans, and millions of consumers are being dragged into a fight they did not create,” Stverak said. “The Credit Card Competition Act is not a surgical strike against Wall Street. It is a sweeping federal routing mandate that could reshape the entire payments ecosystem, pressure investments in fraud prevention and cybersecurity, reduce card benefits, restrict access to affordable credit, and shift costs back onto consumers. For defense credit unions, those consequences directly affect the financial readiness of the servicemembers and families they serve.

Stverak emphasized that DCUC remains “unequivocally opposed” to the Credit Card Competition Act in any form and on any legislative vehicle.

“We will closely monitor additional cosponsors, amendment activity, negotiations surrounding the Clarity act, and any attempt to attach the Marshall-Durbin language to must-pass legislation, like the NDAA. This development materially increases the threat, and DCUC’s advocacy will increase with it.”

It may be too soon to tell conclusively, but it’s possible that the ground is shifting on CCCA, stated McKechnie.

“First, the President restated his support for the bill, which, while not new, probably increases pressure on the Senate to hold a vote,” McKechnie pointed out. “Now the two Republican Senators cosponsored the bill during a very contentious period of negotiations on the cryptocurrency bill. That timing has led to a lot of speculation that it was done in retaliation for intense bank lobbying against the yield language in Clarity. This is the definition of a tangled web, and it could get more tangled in September.”