Durbin’s Bill Could Crush Community Banks

(IntegrityPress.org) – Sens. Roger Marshal (R-KS) and Dick Durban (D-IL) are behind a controversial new bill that would fundamentally alter how credit cards are processed in the United States. The new bill would change the network used to process credit transactions from the highly secure network used by banks and other financial institutions to an untested new network likely vulnerable to hackers or other bad actors looking to steal identifying information.

Critics contend that the bill would damage small banks, local credit unions, as well as the safety of your personal data. Consumer advocacy groups like the Electronic Payments Coalition (EPC) have suggested that large mega corporations like Walmart would love to be able to cash in on the benefits of running their own credit cards, but simply refuse to invest in the proper infrastructure to ensure security.

The bill would allow mega corporations to issue credit cards solely for their benefit while claiming the move would benefit consumers. EPC has suggested that the deregulation of processing networks to allow corporations like Target and Walmart to cash in would cost consumers in the long run. They said that the changes would force smaller community banks and credit unions to get out of the business of electronic debit and credit cards altogether.

The tendency of these large conglomerates to fail to guard personal information of their customers is a recurring theme every time there’s a major hack or data breach. Critics contend that the bill would facilitate more criminal activity and create huge targets on the corporations’ backs, should they begin to issue their own credit cards.

EPC has argued that the mega-corporations want all the benefits and profits without having to pay for security and stable infrastructure and encouraged individuals to contact their Congressional representatives to oppose the bill.

Durbin was similarly responsible for a 2010 amendment named after him which created price controls on debit card fees which ultimately harmed the average American consumer with extra burdens on low-income Americans. A 2022 report analyzing the Durbin Amendment and its economic fallout found that consumers ended up paying higher fees thereafter.

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