The North Carolina Bankers Association (NCBA) today voiced strong opposition to a proposed 10% cap on credit card interest rates. The NCBA also reaffirmed its opposition to a credit card payment routing mandate that would weaken the safety, security, and consumer control people rely on when using their credit cards.
“A government-imposed interest rate cap of 10% would eliminate credit card access for millions of Americans and thousands of North Carolinians,” said Peter Gwaltney, President & CEO of the North Carolina Bankers Association. “While mandating an interest rate ceiling on credit cards might sound appealing to some, the reality is that this type of price control would harm, not help, most consumers. Instead, it would devastate families and small businesses that rely on the convenience, flexibility, and security that credit cards provide.”
Gwaltney continued, “Simply put, Government price controls would force banks to tighten credit card lending standards and severely limit consumer access to the safe and reliable credit cards we depend on every day. Those hit hardest would be consumers with imperfect credit histories, for whom a credit card is often a crucial tool for rebuilding their credit record and improving their credit scores.”
The NCBA also urges Congress to once again reject the so-called Credit Card Competition Act (CCCA), which was recently reintroduced by Senator Richard Durbin (D-Illinois) and Senator Roger Marshall (R-Kansas). The CCCA represents additional government interference in the free market through a credit card routing mandate that seeks to control how credit card transactions are processed.
“This mandate—commonly referred to as the Durbin-Marshall Amendment—is another misguided proposal that would leave consumers and small business owners with fewer choices and little to no financial benefit,” Gwaltney said. “It would weaken credit card security, undermine popular rewards programs, and strip consumers of their ability to choose which credit card network processes their payments. Experience from the original Durbin Amendment on debit cards showed that most merchants did not pass interchange-fee savings on to consumers, and some even raised prices, according to research and analysis by the Cato Institute, Federal Reserve Bank of Richmond, and National Taxpayers Union.”
The NCBA strongly encourages Congress to oppose government interference in the credit card marketplace and to preserve a competitive, secure system that works for consumers, small businesses, and the broader economy.
