Association Highlights Unintended Consequences of Proposals Affecting Access to Credit

In a letter to members of its congressional delegation, The MD|DC Credit Union Association is strongly opposing two proposals that could limit access to affordable credit: the reintroduced Credit Card Competition Act and a proposed 10% cap on credit card interest rates.

Senators Roger Marshall, and Dick Durbin, reintroduced the Credit Card Competition Act on Tuesday following an endorsement from President Donald Trump on social media. The Association cautions that the legislation would disproportionately benefit large retailers at the expense of consumers and community-based financial institutions, similar to the unintended consequences of the Durbin Amendment, which failed to deliver promised savings to consumers.

Senate Majority Leader John Thune indicated Tuesday that the Senate will likely take up the Credit Card Competition Act at some point.

The Association also made it clear that a 10% rate cap would likely reduce access to credit, especially for members who rely on credit cards for emergencies or short-term needs. Such a cap would make it difficult for credit unions to safely offer cards to higher-risk borrowers, potentially pushing them toward far more expensive alternatives outside the traditional financial system.

The letter emphasizes that, "Policies intended to help consumers should not weaken the very institutions that already provide affordable, responsible credit."

The Association will continue to engage with Congress to protect access to affordable financial services for credit union members.