Sen. Marshall introduces the Credit Card Competition Act

In the video, Sen. Marshall introduces everyone there to speak in support of the bipartisan bill he is introducing. The first person to speak is a small business owner from Conway Springs, Kansas, Jenny Osner, who owns a small grocery store. Osner tells the brief story of how she came to own the grocery store her and her family built from the ground up after the community grocery store closed 15 years ago.

“When our store was lost 15 years ago, we went back into a food desert,” Osner said. “So, in order for us to have our store now, we’re able to help and provide that healthy food access to keep things going. And if rural grocery stores like ours close, then once again we’re back into a food desert.”

She also said that swipe fees are one of the biggest financial burdens the store has, explaining that every cent counts in rural grocery stores. Osner also stated it’s the second or third highest cost she faces.

“All across America—especially rural America and inner city—we’re losing grocery stores, we’re losing pharmacies, we’re losing hardware stores,” Sen. Marshall said. “Part of it is just the cost of doing business. They’re closing because they’re not profitable, and certainly credit card swipe fees are part of the reasons why they’re not profitable.”

Sen. Peter Welch (D—Vermont) spoke next, stating that there are two “propelling issues”—a lack of a free market for credit card swipe fees and the importance of rural America.

“We don’t have a free market in credit card swipe fees, we have a duopoly,” Sen. Welch stated. “You have Visa and Mastercard that have an immense amount of pricing power. They justify their high fees by saying they’re providing a service. They are providing a service, but they’re overcharging for it. There’s no justification for the fact that merchants like Jenny—and merchants, really, all across this country, including some larger ones—pay those fees other than the pricing power that Visa and Mastercard have.”

Sen. J. D. Vance (R—Ohio) spoke next

“One of the things I consistently heard on the campaign trail in my six months as a senator is from Ohio small businesses who are being crushed by these credit card transaction fees,” Sen. Vance said. “It makes it harder for them to start a business; harder for them to keep a business open, and if we want to have, as Peter just said, a vibrant rural America, we need to have small businesses that can actually operate. That can do their job. That can do their businesses without being crushed by this duopoly.”

Sen. Vance goes onto say that he is a Republican and that Republicans “traditionally believe in the free market.”

“To have a free market, you have to have buyers and sellers who are negotiating on at least a somewhat equal plain,” Sen. Vance continued.

He also said Ohio businessowners have no other businesses to turn to because there isn’t a competitive market.

“The American people did not elect Visa or any other major corporation to make social policy,” Sen. Vance said. “And I’m up here because I support this policy, but part of the reason I’m up here is because a couple of years ago Visa and a lot of other big American companies started to stick their nose where they don’t belong. So, my message to Visa and to anybody else, if you want Republicans, if you want the party of traditionally free markets to let you do your job, then don’t stick your nose in the social policy of this country. Let elected representatives—Democrats and Republicans—make those decisions. It is ridiculous for so many of these companies to be stabbing conservative voters in the back and to expect their bought and paid for Republican politicians to do their job for them.”

Texas State Representative Lance Gooden (R) addressed “misinformation” regarding the bill and told people what to expect in the coming months.

“What these big bank organizations that are led by the big national banks here—they have taken over the state associations,” Rep. Gooden said. “The Texas Bank Association for example does the bidding of these large corporate banks, and they’ve convinced community banks that they’re going to be harmed by this legislation. That’s just not true. Most community banks in the United States won’t even be affected by this bill because of the numbers that they don’t even meet the threshold on.”

Rep. Gooden also said that these organizations were influencing thinktanks and groups that were calling the bill “anti-free market.”

“The reason these groups are saying that is because they’re getting checks from these companies that have been living high on the hog for so many years…. I understand why Visa and Mastercard are doing this. They got a really great deal. They don’t have to negotiate. They can raise rates. And when inflationary times kick in, they can actually make more money because the credit card fees are the percentage of the total purchase. So, when you go to the grocery store, and your grocery bill is so much higher, the amount that these credit card companies are getting is much higher. So, they’re loving this.”

He then warned about inaccurate talking points that local banks may provide that would go against this bill.

New Jersey Republican Representative Jeff Van Drew spoke next, who noted that these fees are hurting not just businesses, but also consumers who are often left paying for the fee, before highlighting the importance of truth. He went so far as saying the fees for card swiping is “un-American.”

“The Credit Card Competition Act bolsters—not diminishes—but bolsters consumers credit card security, and our national security,” Rep. Van Drew said. “These credit card companies argue that only they can protect credit card use. Yet, by opening the market place to the credit card networks that have already established trust both with banks and consumers through their handling of data card transactions, we are versifying the playing field which is a good, American thing. Injecting competition, which is a good, American thing, into a stale marketplace that will spark security and innovation.”

Rep. Van Drew also said the bill will counter the “increasing financial threats” the U.S. is facing from the Chinese Communist Government.

“We are combatting this anti-capitalist market in order to put money back into the hands of where it belongs,” Rep. Van Drew stated.

CFO for Ball’s Food Stores in Kansas City, Kansas Mike Beal spoke next.

“At Ball’s Food, we try to keep every cost as low as possible so that we can always be very competitive with the prices in our stores,” Beal said. “That means we negotiate every single day for every single penny for all the products and inventory that we buy; for the supplies and services that we get from third parties. With our landlords. With our banks. Everything that we do to keep costs at a minimum. But there is one place that we can’t negotiate, and that’s with the credit card companies. The big card companies like Visa and Mastercard centrally price-fixed the swipe fees charged by the banks that issue their credit cards, and then the banks pass those fees onto us, which we can do nothing about.”

Beal also claimed that Visa and Mastercard have blocked transactions on their cards from being processed over other networks that could possibly provide lower fees and better security.

“In short, there is no competition over credit card swipe fees, but the Credit Card Competition Act would fix that by requiring that the nation’s credit card companies and the nation’s largest banks enable a second network on each card. That would force credit card networks to compete over fees, security, and service, and is expected to save businesses—and is expected to save consumers over $11 billion a year.”

Beal also said small businesses are being hit the hardest and so they are calling out the loudest for reform. This is due, as he explains, to a lack of resources to navigate complex credit card contracts or any leverage to get lower credit card swipe fees.

President of the National Federation of Independent Business (NFIB) Brad Close, who was the final speaker, said that 92 percent of small business owners want a choice when it comes to processing credit card transactions, which they currently don’t have.

“What they want is a level playing field,” Close said. “For a small businessowner, they have got to compete every day. Not just against local businesses, but often times against their big business competitors as well as credit card companies.”

He concluded that businessowners want choice so they can decide what’s best for their business, not what’s best for banks or credit card companies.

Sen. Marshall made some final points to end the introduction, including:

• Americans pay seven times more for swipe fees than the EU does

• Americans pay on average $200 more a month on swipe fees than “our friends across the pond”

• It boils down to a lack of competition

• The legislation will force banks to provide a second choice for the router on the credit card

• The banks will get to decide the second option so they will be responsible to hire a credible company

• The company they choose cannot have a foreign government ownership in it, so companies like China Union will not even be eligible

• Every bank whose assets are under $100 billion will not be affected under this bill

• This bill is meant to bring competition to drive down swipe fees