Interchange Battle Heats Up with Move to Add Bill's Language as Amendment to NDAA

U.S. Senate Majority Whip Dick Durbin (D-IL) and U.S. Senator Roger Marshall, M.D. (R-KS) are ramping up their efforts to win passage of their interchange bill by introducing the language as proposed amendments to the National Defense Authorization Act (NDAA), a must-pass piece of legislation.

Their first amendment would direct the Department of Defense (DoD) and the Treasury Department to issue a report about a current law, 10 USC 1065, that requires some veteran populations including Purple Heart awardees, Medal of Honor recipients, former POWs, veterans with service-connected disabilities, and veteran family caregivers, to pay surcharge fees for using credit or debit cards at military commissaries to cover the cost of the interchange fees. The report would ask for information from the last fiscal year on how much is being charged in these fees, which card networks and banks are receiving the fees, how much each category of veteran is being charged, and whether any banks or networks are reimbursing the swipe fees in order to spare the veterans from being surcharged for the fees.

Their second amendment is Durbin and Marshall’s bipartisan Credit Card Competition Act of 2022, legislation they say would enhance competition and choice in the credit card network market. The bill would direct the Federal Reserve to ensure that giant credit card-issuing banks offer a choice of at least two networks over which an electronic credit transaction may be processed, with certain exceptions. Representatives Peter Welch (D-VT) and Lance Gooden (R-TX) introduced the House version of the bill.

"Every credit union should be concerned with this latest development on the interchange bill," says League President/CEO Carrie Hunt. "The potential addition of this bill to the Senate NDAA makes our outreach efforts to lawmakers that much more important. We must fight this every step of the way."

"Interchange has been a priority issue for your League and credit unions for months, even before the official introduction of legislation, but now we urge credit unions to redouble their efforts to reach lawmakers," adds Hunt. "Our best chance of winning on this issue is to make our case for how this legislation will reduce our ability to fight fraud, cover fraud losses, protect data and provide access to credit."

Senate debate on the National Defense Authorization Act is expected to begin on Oct. 11. The House has already passed its version and after the Senate votes on a package the two versions will be reconciled.

Note: Credit union advocates can use our Advocacy Action Center to easily email our lawmakers on the interchange issue.
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The 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. Financial institutions cover the costs for replacement cards and fraudulent purchases, making them more sensitive to changes in the payments system than merchants.