Syndicated columnist Veronique de Rugy says legislative limits to credit card market are hurting consumers.
Central planning, never out of fashion on the left, is now more popular than ever on the right thanks to the GOP's populist takeover. This is why a recurring effort to intervene in the credit card processing market is finding more support in the new Congress than it did in the previous one.
Some merchants who enjoy the benefits that come with accepting credit cards as payment -- attracting customers who prefer this convenience -- have decided they don't like to pay the cost. So as special interests often do, they've turned to Washington to intervene. They and their advocates claim this will benefit the public, since their savings would be passed on to consumers through lower prices.
Enter the Credit Card Competition Act, which Durbin sponsors. It's an attempt to reduce credit-card fees by using a slightly different route: Rather than a straight-up price control, it would amend the Electronic Fund Transfer Act to compel the Federal Reserve to require banks add at least one additional payment network for their cards. Proponents -- including a few Republicans, such as freshman Ohio senator and populist conservative J.D.
by signing up you agree to our terms of service The Durbin Amendment not only failed to help customers but appears to have hurt them. It resulted in the widespread elimination of debit-card rewards programs and fewer banks offering free checking accounts. The ranks of the unbanked increased by 1 million. That is likely to happen again if more credit-card central planning is adopted.
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