The supporters of the Credit Card Competition Act (S. 1838 and H. R. 3881) declare that its passage would reduce costs for merchants and prices for consumers. Its backers, however, ignore the fact that it may very well increase the cost of credit card transactions by abetting an increase in fraud, which would ultimately result in higher costs and reduced access to credit for millions of Americans.
The bill has its origins in an amendment to the Dodd-Frank Act, which requires the 134 largest banks that issue consumer debit cards to add alternative electronic network processing agents, besides the Visa or Mastercard networks. The CCCA effectively extends and expands these rules to credit cards.
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