Congress comes after Kansas credit cards – Kiowa County Signal

By James Lowe

Here in Kansas, we are fortunate to have two powerful conservatives representing us in the United States Senate. Since Democrats took control of the White House and Congress last year, they have been constantly looking for new ways to overhaul the way Kansans live their lives. Their policies translate into runaway inflation and skyrocketing energy prices. We feel it every time we go to the grocery store or fill up our gas tanks. Nonetheless, Senators Roger Marshall and Jerry Moran have resisted Congressional leadership at every turn and they are fighting for us. We will need them to keep the fight going as progressives try their latest ploy: regulating our credit cards.

In 2010, Senator Dick Durbin successfully pushed major debit card regulation into the Dodd-Frank Act. The Durbin Amendment, as it was called, completely changed the banking system forever. This amendment imposed new routing requirements and implemented federal price controls on the fees retailers pay when accepting debit card payments. Durbin and his progressive allies promised at the time that these changes would lower prices for American families. But big government price controls never work, and this one is no exception.

Twelve years after the Durbin Amendment was implemented, we haven’t seen cheaper products. The Richmond Federal Reserve found that 77% of retailers did not lower prices and 21% actually raised them. New routing requirements required retailers to link with at least two unaffiliated networks. The change opened the door for alternative networks like state-owned China Union-Pay to do business in the United States, giving China access to Americans’ debit card information.

Due to the high costs associated with the Durbin Amendment, many Americans lost access to banking benefits such as free checking accounts. Another study by the Federal Reserve found that the availability of free checking accounts at Durbin Amendment banks fell by 35%, while the number of Americans without bank accounts increased by about 1 million.

It will also add unnecessary strain to the Kansas banking system. The state has already been in the grip of a banking crisis for years due to the insolvency or near insolvency of many of its financial institutions. While this issue has improved significantly over the past two years, the added costs of expanding the Durbin Amendment could undermine much of the progress the state has made in recent months.

The Durbin Amendment was a terrible idea in 2010, but now the Democrats are back for more. This time they are pushing to come after Americans’ credit cards by expanding those regulations. Kansans would lose big if that happened.

Just like last time, consumers should expect to lose benefits. Credit card reward programs and cards with no annual fee could be a thing of the past.

Perhaps most concerning is the loss of routing network choice for consumers. The proposal would extend the same routing rules to credit card transactions that allowed China UnionPay to enter the US debit market. There is a legitimate concern that the security and protection against fraud currently enjoyed by Kansans will be compromised by this change. Instead of using the network they have chosen for their card, such as Visa, Discover, Mastercard or American Express, mega-retailers would make the choice for them and could opt for the least expensive and least secure option.

Finally, many Kansans could lose access to their community banks. At the end of last year, Kansas had 214 community banks. We rely on these smaller banks to house our personal savings accounts and our business finances. These are staples of our rural communities. Expanding the Durbin Amendment would impose new costs on community banks as they attempt to comply with overregulation by Democrats. They can’t afford it, and neither can the Kansans.

Washington Democrats, like Durbin, don’t have Kansas’ best interests in mind. We need our Republican leaders, like Marshall and Moran, to continue to fight for our consumers and our values. It should start with making sure that these talks on this expansion of the Durbin Amendment remain just that – talks.

James Lowe is a longtime conservative political commentator from Kansas and a veteran of the radio industry for two decades. He is the host of his own nationally broadcast radio show based in Kansas and streamed on the Iheartradio app.