Legislative Update with Jay Kruse

We continue to do all we can to ensure the Credit Card Competition Act is not included in the appropriations process, but we are not out of the woods yet! 

Good morning and happy Wednesday! It’s that time of the year again – and no, I’m not talking about Halloween, Thanksgiving, or even fall. It’s “fund the government” and NDAA season! Both are part of the “appropriations process.”
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A short civics refresher may be helpful: The president submits a budget to Congress for the federal government every fiscal year (October 1 through September 30). Congress must then pass appropriations bills to provide money to carry out government programs for that year.

It’s like clockwork. Every year, once we hit September and October, legislative focus in Washington seems to focus on two things, passing what they refer to as a Continuing Resolution (CR) to temporarily fund the government, in addition to the National Defense Authorization Act, which we like to fondly refer to as NDAA. The NDAA funds the military and other critical defense priorities.

On September 30th Congress passed their 2022 CR, which funds the government until Dec. 16th.
As I mentioned, the NDAA funds the military and other critical defense priorities. Well, at least that’s what it’s supposed to do. Credit unions’ main focus on the NDAA each year usually revolves around ensuring military bases and personnel have access to adequate and affordable financial services no matter where they are located. We are proud of the work we do every year to help preserve the Department of Defense’s discretionary authority to exempt credit unions from the costs associated with land leases on military bases when appropriate.

However, this year, we have moved on to a much larger concern, the potential inclusion of the Credit Card Competition Act in the next NDAA. The legislation proposes new credit routing mandates that would give retailers—not consumers—the power to decide which credit card network is used—all to increase the bottom line of large, big box retailers with little to no regard given to fraud, privacy, or cybersecurity. These non-germane amendments that have nothing to do with military or critical defense priorities will rob military families of their credit card rewards, reduce the availability of safe credit, and undermine the nation’s data security.

We may not see eye-to-eye on everything, but there is one topic in which America’s credit unions and banks agree: these amendments are not relevant to the NDAA and would negatively impact America’s servicemembers and their families.

A continuing message we continued to hear during most (if not all) of our Hike the Hill congressional meetings, was that there was little to no appetite from anyone in Congress to add any non-germane or “out of left field” amendments to the CR or NDAA. But, this is politics and anything can happen. In fact, it has happened before when the “Durbin Amendment” was added during the 11th hour to the Dodd-Frank Wall Street Reform Act and Consumer Protection Act back in 2010.

The federal government’s attempt to impose price controls by regulating interchange through the Durbin Amendment is the purest example of a failed government policy. Congress should not double down on this failure in this year’s NDAA, especially considering it is not specifically related to the military or defense in any way.
We will continue to do all we can to help ensure the Credit Card Competition Act is not included in this year’s NDAA or any other of the Congress’s upcoming Appropriation Bills, but we are not out of the woods yet. Keep an eye on The Memo for more updates and potentially another Action Alert as the Appropriation Process continues to play out.

As always, don’t hesitate to contact me with any legislative or advocacy questions. 

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