For some, the Credit Card Competition Act making its way through Congress would introduce competition in the credit card payment processing sector, primarily handled by major networks like Visa and Mastercard.
For others, if the proposal became law, the implications would be “disastrous.”
The Alabama Credit Union Association (ACUA) says a recent report by Cornerstone Advisors identifies clear-cut downsides of the proposed legislation — including fewer privacy protections, more data breaches, and higher costs for consumers and small businesses.
According to the group, Cornerstone’s study underlines the extent to which “big box” retailers would “win out” over Alabama’s small businesses.
“If the current payments system is turned upside down, merchants would be stuck with costs to upgrade both point-of-sale systems and payments systems software. It would also bog down staff in unnecessary regulatory red tape and compromise consumer confidence. Given their massive economies of scale, big box retailers would absorb these costs relatively easily, while small businesses would likely watch savings from this ‘fix’ seemingly vanish overnight,” ACUA says.
Saying the proposed law would parallel a provision to the Dodd-Frank Act “that shorted consumers between $22 and $25 billion,” ACUA says the study shows both consumers and small businesses would ultimately bear the brunt of the shift.
“Alabama’s elected leaders have consistently stood shoulder to shoulder with us on this issue,” said Michelle Roth, Senior Director of Governmental Affairs at ACUA.
“We thank them for their support and urge every lawmaker to help keep the government out of our pocketbooks. Simply put, this legislation is trying to fix a problem that doesn’t exist. The ACUA will work tirelessly to halt any bill that puts credit unions and their members at risk of shouldering the impacts of an ill-advised proposal seeking to put profits over people.”
The future of the Credit Card Competition Act remains uncertain as Congress works its way through a buy year-end legislative calendar. Groups promoting and advocating against the legislation are encouraging consumers to do their own research on a law that could have serious implications for the way they make everyday purchases.
Grayson Everett is the state and political editor for Yellowhammer News. You can follow him on Twitter @Grayson270