North Shenandoah News

Brandon C. Lorey, the president and CEO of Bank of Clarke and Eagle Financial Services Inc., said perennially-proposed federal credit card regulations "poses substantial risks" for Virginia bankers, consumers, and businesses. 

"As we progress into 2025, it's imperative to remain vigilant about legislation that could significantly impact our local financial institutions," wrote Lorey in an op-ed in the Winchester Star. "One such proposal is the 'Credit Card Competition Act,' which, despite its promising title, poses substantial risks to community banks, consumers, and small businesses across Virginia."

"The act is presented as a means to enhance competition in the credit card industry. However, it is primarily supported by large retailers aiming to reduce the fees associated with credit card transactions," wrote Lorey. "This approach threatens to undermine the established payment systems that ensure secure and efficient transactions for consumers."

Originally sponsored by U.S. Sens. Richard Durbin (D-Ill.) and Roger Marshall (R-Kans.), the so-called Credit Card Competition Act would require banks to offer merchants at least two network options, one of which cannot be Visa or Mastercard, for processing credit card transactions. Opponents to the bill argue that if given the choice, retailers would likely choose cheaper, less secure networks for processing transactions, thereby exposing consumers to increased securities and fraud risks.  

The bill applies to credit cards what a similar measure in 2010, often referred to as the “Durbin Amendment,” applied to debit cards. The 2010 measure was a requirement of the “Dodd–Frank Wall Street Reform and Consumer Protection Act.”

Nationally, the bill could lead to a $227 billion loss in U.S. economic activity and 156,000 lost jobs, according to an analysis conducted for the Electronic Payments Coalition (EPC) by Oxford Economics Research (OER).

The legislation also is opposed by the Virginia Bankers Association (VBA).

“If passed, this legislation will likely mean the elimination or severe restrictions on credit card rewards programs going forward – something many millions of Americans count on and benefit from, especially working class consumers.” Chandler Owdom, VBA’s senior vice president of communications and strategy told Old Dominion News in May 2024. “Despite the rhetoric from supporters of the bill, this provision will negatively impact banks of all sizes, including community banks as we saw with interchange caps on debit cards.”