The Credit Card Competition Act

The Credit Card Competition Act Explained

H.R. 8874, THE CREDIT CARD COMPETITION ACT

Giant credit card companies and Wall Street banks continue to take advantage of Main Street businesses. These activist companies have demonstrated they are acting in their own best interest at the expense of our constituents. To hold them accountable, I introduced the Credit Card Competition Act. 

I have sponsored this bill because I believe when free markets are allowed to work, consumers are the ones who benefit the most. Unfortunately, the Visa and Mastercard duopoly games the system, takes advantage of consumers, and corrupts the free market. 

You can read the full text of the legislation here. 

Supporting Organizations

KEY FACTS

The Credit Card Competition Act would: 

1. Make Visa/Mastercard Compete on Price and Service 

  • Visa and Mastercard dominate 85% of the credit card market, resulting in Americans paying the highest swipe fees in the world and costing American families $900 last year. 

  • While families and businesses are burdened with these fees, Visa’s CFO boasted this year they are a “beneficiary of inflation.” 

  • Visa and Mastercard have long prohibited banks that issue their credit cards from putting a 2nd network on the card, using their market power to squash any competition. 

  • H.R. 8874 requires the largest banks that issue cards to enable a 2nd competitive network of their choosing on every card. 

  • It forces Visa and Mastercard to compete like every other business in America and gives community banks a chance to compete against the largest banks in the nation.  

2. Strengthen Card Security by Prohibiting the Chinese Communist Party from Entering the US Market 

  • H.R. 8874 includes language that prohibits a network that is owned, funded, or sponsored by a foreign state entity from processing U.S. credit card transactions, meaning China Union Pay would be prohibited as a network. 

  • Without this bill, the largest US banks could choose to partner with China Union Pay, a network funded by the Communist Party of China. 

3. Increase the Security of Our Payments System  

  • With heightened threats of a cyberattack from a foreign enemy in the U.S., our credit card system is uniquely vulnerable. 

  • Today, if one of the global networks – Visa or Mastercard – experience a cyberattack, it could shut down a majority of credit card payments in the U.S. 

  • H.R. 8874 would add a secondary network that could process those transactions in the event of a cyber event. 

4. Protect Banks Under $100 Billion in Assets 

  • H.R. 8874 only applies to banks with $100 billion or more in assets and simply requires they enable a 2nd network on their credit cards. 

  • 90% of credit cards are issued by the largest banks in the U.S. 

  • There are only 32 banks and 1 credit union above the $100 billion threshold. 

  • This means all other small, mid-sized, and most large financial institutions are exempt from the requirement.