Sen. Richard Durbin (D-Ill.) recently introduced legislation to regulate how credit-card transactions are routed that, if passed, would hinder competition between credit-card issuers, reduce benefits for consumers, and impede fraud detection and prevention.
Co-sponsored by Sens. Peter Welch (D-Vt.), J.D. Vance (R-Ohio) and Roger Marshall (R-Kan.), the Credit Card Competition Act would require banks with more than $100 billion in assets to offer merchants the choice of at least two routing networks on credit cards they issue, one of them being a smaller competitor to Visa and Mastercard. The legislation, which would cover most existing cards, intends to address merchants' concerns about requirements to route transactions over the payment network branded on the card.
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