Congressional proposal might put your local credit union out of business

by | May 26, 2022

Brewster Bevis

With a special session of the legislature underway in Tallahassee, Associated Industries of Florida (AIF) is also keeping an eye on proposed legislation in Washington, DC. A few weeks ago, we wrote to Senator Marco Rubio and Senator Rick Scott to oppose legislation Senator Dick Durbin of Illinois is crafting to put price caps on credit card fees. We warned that new federal regulations on the routing process of credit cards could result in undue security risks to customers’ financial information.

Unfortunately, talk of these onerous new regulations continues to live on in Washington. Senator Durbin recently spoke on the Senate floor and warned that interchange fees on credit cards amounted to a “free lunch for the banks.” This is the kind of baseless rhetoric from Durbin that we continue to push back against. In fact, the Florida Credit Union Association just wrote to our Florida US Senators on May 16th to urge them “to decline to support” Durbin’s changes to interchange fees. They said specifically:

“It is our position that routing mandates represent government interference in a well-functioning market, federal second-guessing of complex and dynamic private sector decisions, and an uncompensated regulatory taking from credit unions who must bear the costs. Like all mandates for a company to purchase a service, this would be a matter of the government substituting its judgment for that of the parties directly concerned. There is no public policy justification: consumers receive no savings from promised lower routing costs for merchants and consumers are in fact, harmed by reduced network quality, reduced consumer protections, and reduced security.”

The Florida Credit Union Association rightfully pointed out that this issue is not a “mega-bank issue.” Thousands of credit unions offer credit cards and the “stealth price control” of new, costly routing mandates would be a major burden on small, community banks at a time when they are already working harder than ever to remain competitive.

Additionally, the Florida Bankers Association also weighed in with our Florida senators in opposition to changes in interchange fees in early May. The FBA’s CEO Alex Sanchez wrote, “Not only would this federal intrusion limit our freedom to choose our routing partners, but it could also compromise the current security of financial transactions. Customers trust the financial institutions they choose to get a credit card from to also keep their personal financial information safe. Upsetting this system could cause a disruption to this highly sensitive information.”

It is AIF’s hope that Washington will continue to pay attention to the banking leaders in Florida, and moreover the hundreds of community banks that they represent, as they weigh the arguments from Senator Dick Durbin in the weeks ahead. While Senator Durbin’s philosophy will always be that the federal government does it better. We do not agree. In Florida, we believe in freedom and in not having Washington attempt to fix something that is not broken.

Brewster Bevis is the President and CEO of Associated Industries of Florida, a voluntary association of diversified businesses created to foster an economic climate in Florida conducive to the growth, development, and welfare of industry and business and the people of the state.


  1. Chico McDenny

    Sounds like this “warning was written by and for big banks. My credit union Would Do better under Sen. Durbin’s proposed cap on credit card fees. AND, it would help to lower the price of goods. Or to fight inflation. Why are Republicans opposed?

  2. Deborah Coffey

    Baloney. Republicans NEVER do anything to help people…only Big Business and donors. Sick of it.

  3. Alex Brown

    Thanks for useful article

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