As 2023 hits full stride, I think it’s important to reflect on a very important prior year policy victory that reminded us how effective our industry can be in thwarting harmful federal legislation if we simply stick together. Legislation proposed by the Merchants Payment Coalition (MPC), which is funded largely by the deep pockets of mega-retailers including Amazon, Walmart and Home Depot, to name a few, would have financially harmed banks, weakened credit card payment security and decimated rewards programs for credit card consumers. The falsely named Credit Card Competition Act (Durbin 2.0) was a bad idea, a REALLY BAD IDEA.

Unfortunately, when bad ideas are funded by very deep pockets, they can sometimes get traction, as our industry experienced in 2010 when the original Durbin Amendment was successfully added by merchants to the Dodd-Frank Act. In 2010, merchants capitalized on the aftermath of the 2008 financial crisis and their close relationship with Senator Dick Durbin, the second-highest-ranking member of the Senate Democratic Caucus since 2005. In 2010, it was a classic case of leadership (in this case Sen. Durbin) taking advantage of a crisis or at least a perceived crisis. That same “leadership meets crisis” strategy was deployed late in 2022, with merchants and Senator Durbin once again teaming up to pass one-sided legislation that would have proven to be another financial windfall for big box retailers.

While the merchant coalition’s strategy was virtually identical during their push late last year for Durbin 2.0, there was one very key difference that I believe won the day for banks and their credit card customers. The difference was our industry, the banking industry, sticking together. Senator Durbin and the MPC took advantage of cracks and outright division on policies being bundled together for the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. This time, when the MPC attempted to amend Durbin 2.0 into the National Defense Reauthorization Act, opposition from the banking industry remained united. When the MPC then tried to garner support for adding their credit card dual routing government mandate to the $1.7 trillion 2023 omnibus spending package just before Christmas, opposition from the banking industry remained united. In both cases, a united banking industry won the day.

The coming year will undoubtedly bring its own set of challenges for our industry. Senator Dick Durbin remains the Senate Majority Whip, so the MPC will want to capitalize on those close ties once again. While we can’t control what others do, we can significantly increase our odds of curtailing any harmful legislation considered in the Halls of Congress this year by simply sticking together as an industry.

For additional insight into the Credit Care Competition Act, please go to page 12. There you will find an article written by Rob Nichols, President and CEO of the American Bankers Association.

I would be remiss if I didn’t share that team ABA deserves high praise for their leadership and defense of the banking industry on this issue.