Letter: Credit Card Competition Act would be good for consumers – Grand Forks Herald

Letter: Credit Card Competition Act would be good for consumers - Grand Forks Herald

Mr. Jeff Olson, president and CEO of Dakota Credit Union Association, claims in his letter to the editor

(Dec. 10: “Credit Card Competition Act would harm consumers and access to credit”) that the “Credit Card Competition Act” being considered by Congress is a threat to consumers. Nothing could be further from the truth.

Swipe fees or interchange fees are processing charges that each retailer pays on every credit card transaction. These fees are in addition to the cost of products and services sold. Currently Visa and Mastercard set these fees for the credit unions and banks. Retailers have no recourse but to pay them. These fees can range from 2% to 4% of the total transaction. Think of all the transactions you as a consumer make using a credit card.

Mr. Olson claims that this only costs a few cents per transaction and admits that the retailer needs to pass this cost on to the consumer. These hidden fees add up to nearly $1,000 per American family each year.

The Credit Card Competition Act’s main provision is to allow merchants to ask other processing companies to compete for their credit card business. Credit card companies currently do not allow competition. The monopolistic practices stifle cost savings to consumers and hinders innovative security features that other nations already have.

Another feature of this legislation is that it prohibits the processing of credit cards by foreign companies. Currently Visa and Mastercard have brought China Union Pay into the companies they use to control our credit card security. This bill will prohibit that.

Do you know who profits during these inflationary times – credit card companies. Every time prices increase; they make more money. And without competition there are no incentives to rein in costs charged to businesses in North Dakota.

We are confused why Mr. Olson and his credit union members would weigh in on this issue. If you read the language of the bill, all banks and credit unions with assets of less than $100 billion are exempt. Research shows that only 32 US banks and one credit union in the nation would be impacted.

Why would credit unions pick the credit card industry over main street North Dakota?

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