George Hamblen of Plaistow is an information technology executive with extensive financial services experience implementing federal mandates, including Dodd-Frank. He has over 30 years of information technology experience.

At the end of last year, Congress came together to pass the 2023 omnibus spending bill. It included funding for 105 New Hampshire-specific projects like our food banks, our public libraries, and our local emergency services.

Additionally, the billions in funding for housing assistance, nutrition access, childcare, and help with utility bills are a lifeline for folks struggling to keep up with inflation.

But sometimes what stays out of a bill is almost as important as what winds up in it. Some members were pushing to add the Credit Card Competition Act (CCCA), which would have been disastrous for small businesses, their customers, and the local banks and credit unions that serve our communities.

The CCCA is based on existing regulations in how debit card transactions are processed. Passed over a decade ago, the debit policy limited interchange revenue (the fees that merchants pay to process debit card payments) via a cap on the fees and a routing mandate. So rather than charging a percentage of the transaction at any price, that fee was capped at twenty-two cents.

While that is a well-intentioned policy, it’s pretty clear what actually happened. Big box retailers were happy to pocket an extra $90 billion over the last ten years and, per the Federal Reserve Bank of Richmond, those retailers either kept prices the same or even raised them.

Those interchange fees were also central to local banks and credit unions maintaining no fee checking accounts among other services. Since the passing of the debit rule, these community financial institutions have lost $1 billion and are shuttering across the country. As a result of this lost revenue, banks have had to raise fees and minimum balances, harming the communities they want to serve.

And while the Amazons and Walmarts of the world are happy to see that 22¢ cap, small businesses haven’t fared so well. That’s because many networks have just instituted a flat 22¢ fee on all transactions and have dropped the percentage-based fee altogether. So small businesses pay more, consumers pay more, local banks have to figure out how to make up lost revenue, but big retailers keep that extra money for themselves and their shareholders.

Even though the CCCA wasn’t added to last year’s omnibus, those same retailers are continuing to push it. We know that damage that it has caused when applied to debit cards, putting these regulations on credit cards would only make things worse. In fact, we don’t even have to imagine it. The Federal Reserve Bank of Australia put similar regulations in place and the results were clear.

Credit cards without annual fees largely disappeared, existing annual fees rose and rewards programs were slashed. Younger people looking to build good credit will find themselves paying more and families who rely on cash back for groceries or gas will fare worse.

Big box retailers will keep pushing for the Credit Card Competition Act because it will give them a windfall of cash, but everyone else will suffer, especially consumers. For the good of Granite Staters and consumers across the country, we must call on our elected officials to keep CCCA far from the Senate floor.

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