The banking sector is going to deal with something today that it’s been trying to avoid all year long — a Senate hearing about credit card competition. It’s just not coming from the Banking Committee.
The Senate Judiciary Committee will convene this morning for a long-awaited hearing on what Chair Dick Durbin (D-Ill.) calls the Visa-Mastercard “duopoly.” Durbin has a bill with Sen. Roger Marshall (R-Kan.) that would require card companies to allow retailers another choice of payment network besides Visa or Mastercard to lower “swipe fees.” The financial sector argues that retailers aren’t likely to pass along the savings.
Under Durbin, Judiciary has sought jurisdiction over credit cards on antitrust grounds. Visa and Mastercard are the largest players by far in the credit card space, and the retail sector believes the two companies have used their market share to keep swipe fees unfairly high.
Banks are already on the offensive. Richard Hunt, executive chair of the Electronic Payments Coalition, dismissed the hearing last week as a “desperate, 11th-hour attempt to deliver on promises made to some of their largest donors.” And lobbyists are circulating letters from airports around the country — including multiple airports from Sen. Chuck Grassley’s native Iowa — signaling opposition to the CCCA. The airline industry is deeply enmeshed in the credit card market.
The Senate Banking Committee hasn’t really touched this issue, though outgoing Chair Sherrod Brown (D-Ohio) signaled some openness to credit card reform in late 2023.
Other members of the banking panel made clear this week some toes are being stepped on, albeit politely.
“We clearly have jurisdiction on this particular issue,” Sen. Mike Rounds (R-S.D.) said, though it was “not a problem” for another committee to weigh in. “The expertise that you find within the financial services committee, and the number of individuals that would have an interest in that… would probably be more invited to a Banking Committee hearing,” Rounds added.
But Durbin and Marshall have been banging this drum for a while. Advocates for credit card reform often push hardest during the lame duck, when the annual defense authorization offers the (distant) hope of financial policy riders. Durbin told reporters Monday night he’d push for the CCCA to receive an amendment vote in the NDAA this year, too.
But for today, the Judiciary hearing is the main event. The witnesses slated to testify are interesting, including Mastercard President Linda Kirkpatrick and Bill Sheedy, a senior adviser to Visa CEO Ryan McInerney.
Keep an eye on the entire dais. Credit card reform is one of Washington’s most interesting lobbying fights because it pits the banking and retail lobby against each other. As a result, lawmakers are often loath to take a public position on it. Today’s hearing will be an interesting peek at where senators’ priorities seem to lie.
Correction: An earlier version of this story referred to Sen. Chuck Grassley (R-Iowa) as the ranking member on the Senate Judiciary Committee. Sen. Lindsey Graham (R-S.C.) is currently the ranking member.
