The chair of the Senate Banking Committee isn’t ruling out legislative action to reform credit card markets, a potentially significant blow to the financial sector.
We asked Sen. Sherrod Brown (D-Ohio) Thursday about the Credit Card Competition Act, a bill that would restructure credit card markets by requiring issuers to offer a choice of at least two payment companies in electronic transactions. Banks are fiercely opposed to the bill even getting a vote, let alone being enacted.
Brown started by saying his top priority continues to be passage of bank executive accountability legislation he co-authored with Sen. Tim Scott (S.C.), his GOP counterpart on Banking. The committee advanced the RECOUP Act earlier this summer with nearly unanimous bipartisan support.
But after that bill gets taken up by the full Senate, the Ohio Democrat said he’d be open to a bipartisan conversation about credit cards.
“Once that’s on the floor, I’m willing to try the same process on this,” Brown said. “I don’t know if it’s possible.”
The banking industry has more than a few things to worry about in Washington these days. But even as a legislative longshot, the credit card bill – sponsored by Sens. Dick Durbin (D-Ill.), Roger Marshall (R-Kansas), Peter Welch (D-Vt.) and J.D. Vance (R-Ohio) – is viewed as one of the sector’s most serious threats. Credit card fees are a major profit source for many banks, thanks in part to the dominance of Mastercard and Visa in the payments sector.
Industry angst over these reforms has surged over the past week. As we wrote Wednesday morning, Marshall had been pushing for his bill to get a floor vote in exchange for unanimous consent on the Senate’s $280 billion spending minibus.
So getting buy-in from Brown to begin even initial negotiations over reforms would be a major victory for the retailer lobby. Advocates have long argued that the fees merchants pay for credit card payments are exorbitant. It’s also worth noting that when Durbin introduced the latest version of the bill, it was referred to the Banking Committee.
Here’s more from Brown:
Brown also said that “the banks have way too much power. There’s no question about that.”
We followed up on that, trying to clarify whether Brown was talking about the credit card market.
Brown replied: “Well, everything.”
– Brendan Pedersen
