The Sconi

Anthony Lamorena, a Federal Government Affairs Fellow at the R Street Institute, expressed skepticism regarding the Credit Card Competition Act's potential to reduce costs and improve service. He said that past debit card regulations undermine such claims.

"The argument used to prop up this bill is that it will 'incentivize better service and lower cost,' but evidence from a similar proposal of the past paints a different picture," said Lamorena. "Debit card regulations imposed through the Dodd-Frank Act have hurt consumers by wiping out valuable benefits, such as rewards and better security."

According to Flagship Advisory Partners, the proposed legislation could unintentionally disrupt the U.S. payments ecosystem by mandating changes to established card networks. The act would require banks to offer a second unaffiliated network for credit card transactions, akin to debit card routing mandates under the Durbin Amendment. Critics argue this could hinder investment in payment infrastructure, stifle innovation, and decrease the overall value of credit card products.

The Federal Reserve reported that fraud losses for debit card transactions averaged 1.3 cents per transaction in 2021, with higher losses on unaffiliated networks compared to dual-message networks. If the Credit Card Competition Act results in more routing through lower-security alternatives, consumers might face increased fraud risks.

The Electronic Payments Coalition cautions that credit card routing mandates under the act could diminish consumer rewards and heighten fraud exposure in Wisconsin. Following similar debit card regulations, many Wisconsin-based banks reduced or eliminated rewards programs, affecting everyday spending benefits for residents. The proposed changes could impose comparable costs on Wisconsin consumers.

Lamorena is a Federal Government Affairs Fellow at the R Street Institute with a focus on regulatory reform, financial services, and technology policy. His background includes government and nonprofit roles specializing in legislative outreach and public engagement. His work frequently explores market-based alternatives to regulatory interventions.