Reps. Welch and Gooden Introduce Bipartisan Credit Card Competition Act

Press Release

Today, Representatives Peter Welch (D-VT) and Lance Gooden (R-TX) introduced the House companion to the bipartisan Credit Card Competition Act of 2022, introduced in July by Senators Dick Durbin (D-IL) and Roger Marshall, M.D. (R-KS). The legislation would finally bring needed competition and choice to the Visa-Mastercard dominated credit card network market.

"Credit card companies and mega banks keep finding new ways to squeeze our small retailers in Vermont," said Rep. Welch. "In a well-functioning market there is competition and choice. That does not exist in our current credit card network market. This bipartisan bill will correct that and bring much needed competition to the Visa-Mastercard duopoly. This long-overdue bill will help our small businesses thrive and lower household costs for families at a time when they really need it."

"For too long major credit card companies and the nation's top financial institutions have collaborated to sideline community banks and local retailers in Texas," said Rep. Gooden. "Our free-market economy cannot exist without healthy competition, and I am proud to introduce legislation to fulfill my pledge to protect small businesses and ensure these companies can no longer use their monopolistic power to crush their competition."

Currently, Visa and Mastercard account for about 83% of general-purpose credit cards, giving the two companies considerable leverage to impose fees on merchants, who have little choice but to accept higher fees. As a result, U.S. merchants pay some of the highest fees in the world, including network fees paid directly to Visa and Mastercard and swipe fees paid to issuing banks. Those fees are then passed on to consumers.

The Credit Card Competition Act of 2022 will cut costs for businesses and families by requiring that banks with assets of more than $100 billion allow electronic credit transactions to be processed on no fewer than two unaffiliated networks, at least one of which must be outside the Visa-Mastercard duopoly. This change will inject real competition into the credit card market -- lowering the barrier to entry for new entrants, encouraging innovation, and exerting competitive pressure on Visa and Mastercard's fee rates.

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