As lawmakers push to include credit card routing restrictions in the National Defense Authorization Act, the Independent Community Bankers of America (ICBA) has released new polling results indicating strong voter opposition to the policy change.
ICBA Opposes Controversial Legislation
Sens. Richard Durbin (D-Ill.) and Roger Marshall (R-Kan.) are working to attach their controversial credit card routing restrictions to the pending National Defense Authorization Act. In response, the ICBA has voiced its strong opposition to the proposed legislation, citing concerns about its potential harm to Main Street community banks and consumers.
ICBA President and CEO Rebeca Romero Rainey emphasized that applying routing restrictions to credit card transactions would lead to reduced access to credit card services in local communities. Additionally, it could weaken cybersecurity protections and eliminate popular credit card rewards programs, primarily benefiting large retailers such as Amazon and Walmart. The ICBA urges all members of Congress to join them in opposing this anti-consumer legislation, including any attempts to pass it through the National Defense Authorization Act.
The Credit Card Competition Act: A Controversial Policy Change
The proposed Credit Card Competition Act (S. 1838/H.R. 3881) was introduced in the House by Reps. Zoe Lofgren (D-Calif.) and Lance Gooden (R-Texas) seek to allow merchants to process credit card transactions based solely on which network offers the lowest cost for them. However, this change would strip consumers of their right to choose their preferred credit card network. Moreover, the policy change would impose costly adjustments on the payments system, impacting all banks, including community banks, who would be required to subsidize these changes.
New ICBA Polling Results: Voter Opposition
The latest ICBA polling conducted by Morning Consult reveals significant opposition among voters to the proposed policy change. According to the polling:
- Risk of Changing Credit Card Transaction Technology: Two-thirds of voters (66%) view requiring a change to credit card transaction technology as risky.
- Negative Impact on the Economy: Most voters believe that changing the technology used for credit card transactions would negatively affect the economy (62%), inflation (60%), and consumer spending power (57%).
Support for the Community Banking Model
The polling results also underscore strong support for the community banking business model, which would be adversely affected by the proposed credit card routing restrictions. According to the polling:
- Preference for Community Banking Model: Voters overwhelmingly prefer (62%) a community banking model that emphasizes a long-term outlook focused on promoting safety and soundness over generations, rather than a short-term outlook that maximizes quarterly earnings for investors.
- No Penalization for Community-Based Banks: 61% of voters believe smaller community-based banks should not be penalized for the actions of the largest and riskiest banks, such as Silicon Valley Bank and Signature Bank of New York.
- Importance of Personal Relationships with Local Banks: 53% of voters believe the best banking model for consumers is personal relationships with a bank based in their communities.
Consistent Voter Opposition
The recent polling results mirror ICBA polling conducted by Morning Consult last year, which also showed strong consumer opposition to the proposed policy change. In that survey, 61% of Americans expressed that consumers would not benefit from overhauling the card networks, with a bipartisan majority of Democrats (52%), Independents (67%), and Republicans (65%) sharing this sentiment.
The Independent Community Bankers of America® is committed to creating and promoting an environment where community banks can thrive. Dedicated exclusively to representing the interests of the community banking industry and its membership, ICBA advocates effectively, provides best-in-class education, and offers high-quality products and services to support community banks across the nation.