Gooden-Welch Bill Prioritizes Big Box Retailers over Consumers

Changes to the credit routing system would come at a steep cost to consumers

Washington, D.C. (Sept. 27, 2022) — The Independent Community Bankers of America, American Bankers Association, Bank Policy Institute, Consumer Bankers Association, Credit Union National Association, Electronic Payments Coalition, National Association of Federally-Insured Credit Unions, and National Bankers Association sent a letter today to House Speaker Nancy Pelosi and Minority Leader Kevin McCarthy warning the interchange bill introduced by Reps. Lance Gooden (R-Texas) and Peter Welch (D-Vt.) would reduce access to credit, increase security risks associated with credit card use, and limit credit card rewards programs. The eight leading financial services trade associations issued the following joint statement:

“Quite simply, credit cards make life work. Consumers have come to rely on their credit card of choice to pay for gas, groceries, and unexpected emergencies. This is especially true as consumers leverage their credit card rewards to deal with rising costs.

“It’s disappointing that the Gooden-Welch bill prioritizes big box retailers’ profits over consumers at a time when consumers can least afford it. The Gooden-Welch bill would allow merchants to choose the cheapest routing networks — which may not offer the same robust, security as trusted, established payment networks. This creates additional risks for financial services providers that are extending credit to consumers for everyday purchases, big and small.

“That’s an important distinction that retailers are trying to overlook; financial institutions cover the costs for replacement cards and fraudulent purchases, making them more sensitive to changes in the payments system than merchants.

“We are particularly concerned that changes to the current routing system would disproportionately harm credit unions and community banks that serve underbanked areas. We’ve witnessed how the 2010 Durbin Amendment, which was adopted as part of the Dodd-Frank Act, capped debit card fees, leading to a decrease in free checking accounts and low-cost banking services for consumers. We are determined not to repeat the past — and, as such, we oppose the Gooden-Welch bill.”

About ICBA

The Independent Community Bankers of America® creates and promotes an environment where community banks flourish. ICBA is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education, and high-quality products and services.

With nearly 50,000 locations nationwide, community banks constitute roughly 99 percent of all banks, employ nearly 700,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding more than $5.8 trillion in assets, over $4.8 trillion in deposits, and more than $3.5 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at www.icba.org.

###