Credit Card Competition Act, NCUA Third-Party Authority Absent from Senate NDAA Agreement

Lawmakers have released the text of the bipartisan agreement on a Senate substitute amendment for the National Defense Authorization Act (NDAA), which is likely be considered by the Senate in November. Absent from the list of amendments included in the substitute are the Credit Card Competition Act of 2022 and NCUA Third Party Vendor Authority, marking wins for the credit union industry, which has fought hard against the inclusion of those two measures in the NDAA and a third proposal that seeks to study interchange costs for those in the military, which is also absent from the substitute amendment.

"We can view these latest developments as wins for credit unions, but it's critical we remain engaged with lawmakers on the interchange issue and third-party vendor examination authority for NCUA. The Credit Card Competition Act remains before Congress with versions in both the Senate and House, as does third-party vendor examination authority for NCUA," notes League President/CEO Carrie Hunt. “We appreciate the good work of credit unions in helping us keep these issues top-of-mind for our lawmakers. But as we well know, the legislative process is just that, a process, so these wins are a promising sign, but vigilance is key.”

The Credit Card Competition Act, sponsored by Sens. Richard Durbin (D-IL) and Roger Marshall (R-KS), has been hotly contested on Capitol Hill, pitting retailers against the financial services industry. The two senators sought to add the Credit Card Competition Act to the NDAA as an amendment.

Your League last week reached out again to Sens. Mark Warner and Tim Kaine, arguing that any change to the current payments system or moves to cap interchange fees for credit cards will only hamper consumers' access to credit, make the current payments system less secure, and cause cases of fraud to rise.

"We remain in close contact with lawmakers and their offices, particularly on the interchange issue," notes League President/CEO Carrie Hunt. "We have several studies that clearly outline the negative market impact of the Durbin amendment on debit cards and nothing suggests this move to introduce new routing mandates into the current payments system will result in anything other than another failed government policy that harms Americans."

This latest round of contacts with Sens. Warner and Kaine follows in-person and virtual meetings and letters on interchange issues with the whole of Virginia's Congressional Delegation throughout the past several months, including contacts prior to the formal introduction in July of the Credit Card Competition Act.

Among our efforts ...

• We've launched an action alert you and your members can use to contact your lawmakers on the interchange bill.
• We've sent multiple waves of letters to our Congressional delegation, including letters that followed introduction of the bill in the Senate and introduction in the House, plus letters that included several studies on the harm caused by the Durbin Amendment's cap on interchange for debit cards.
  Sample letters available here:
  - Sen. Warner
  - Sen. Kaine
  - Members of the House
• We signed on to a joint letter with other system partners.
• We signed on to a joint letter with the Virginia Bankers Association and the Virginia Association of Community Banks.
• We met, in most cases, multiple times, with every member of our Congressional delegation to discuss this issue.