Genius move strengthens CCCA support

Merchants could well win a round in their fight to lower Visa and Mastercard interchange fees. It came with passage of a procedural vote on the GENIUS Act, a bipartisan bill to regulate stablecoins. Senators Dick Durbin, D-Ill., and Roger Marshall, R-Kan., hope to use the bill as a vehicle for moving the Credit Card Competition Act forward.

The procedural vote to advance the GENIUS Act for a final Senate vote (or cloture vote in legislative parlance) was approved 66 to 32. Senators Durbin and Marshall made clear their intention to include the CCCA as bill as part of an open amendment process encouraged by Senate Majority Leader John Thune, R-S.D., when the Senate takes up a vote on the bill.

Sen. Durbin used a similar procedural move to add legislation regulating debit interchange to the Dodd-Frank Act of 2010.

Comprehensive regulatory framework

The GENIUS Act (officially, the Guiding and Establishing National Innovation for U.S. Stablecoins Act) aims to create the first comprehensive federal regulatory framework for stablecoins, which are cryptocurrencies pegged to stable assets, like the U.S. dollar.

The Credit Card Competition Act would mandate that merchants be able to choose over which networks their payment card transactions get processed. To accommodate that, the largest issuers of credit cards (those with at least $100 billion in assets) would be required to program the cards they issue to be able to be processed on two networks, only one of which could be owned by Visa or Mastercard.

The premise is merchant choice would lower interchange rates, as networks compete for business.

Broad support for CCCA

The CCCA has broad support – from retailers, Republicans and Democrats in the House and Senate, and even Indian tribes. In a recent letter to Majority Leader Thune and Senate Minority Leader Charles Schumer, D, N.Y., the Coalition of Large Tribes asked that the CCCA be attached to any "stablecoin legislation" such as the GENIUS Act "or any other moving [legislative] vehicle."

"The Credit Card Competition Act would be transformative for rural and tribal communities by allowing us to keep more of our revenues in communities rather than allowing big banks to gorge on profits from their unjust, antiquated and completely unnecessary swipe fees," Coalition of Large Tribes Chairman J. Garret Renville said. "Credit and debit card fees literally keep food out of reach for some tribal families."

In a press release, the Merchants Payments Coalition claimed the CCCA has the support of "almost" 2,000 companies and nearly 300 trade associations, as well as a "broad group" of consumer, labor and pro-competition organizations. The National Retail Federation claimed in press releases that Visa and Mastercard collected a record $187.2 billion in interchange last year.

At a hearing called in 2024 by Durbin, Senator Peter Welch told executives of the two card brands that they "are killing small businesses in the U.S."

"You're having a hard time convincing me that the fees here are set to the advantage of the consumer," Senator Lindsey Graham, R-S.C., said at the same hearing. Senator Thom Tillis echoed Graham's comments, asserting that "small businesses have a legitimate concern" and "if you don't figure that out, you're going to get Durbin-Marshall."

Expectations are that the GENIUS Act will come up for a vote after the Memorial Day recess. The addition of the CCCA as an amendment to the bill would have to be approved by a majority of Senators.

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