Timothy M. Antonition: Americans Will Bear the Cost of the Credit Card Competition Act

Antonition is the President and CEO of Space Coast Credit Union

“Senators Dick Durbin (D-IL) and Roger Marshall (R-KS) are pushing for legislation that would change our payment systems for the worse, harming Floridians.”

Consumers across the country already feel the cost of inflation, whether they are at the grocery store or at the gas station. Here in Florida, many families and businesses are working to recover from the devastating impacts of Hurricane Ian.

Yet, Senators Dick Durbin (D-IL) and Roger Marshall (R-KS) are still pushing for legislation that would change our payment systems for the worse, harming Floridians.

The Credit Card Competition Act of 2022 puts more power into the hands of the government by placing a federal mandate on credit card transaction routing.

While supporters of this legislation claim it would bring down the cost consumers pay at the store by limiting the already small fees that merchants pay when they accept credit card transactions, empirical data proves this is a failed policy. These claims were made in the past, and there is no evidence that they became a reality.

After the original Durbin Amendment, which targeted debit card fees, was implemented in 2011, a Richmond Fed report found that 98% of merchants did not pass savings from debit regulation to consumers and over 20% of merchants actually increased prices.

Furthermore, this mandate forced many financial institutions to eliminate debit card rewards programs that many families used to make the most of their dollars. Now, it appears Senators Durbin and Marshall want to take away credit card rewards programs entirely. Eliminating these programs would strip families of all income levels of the travel rewards and cash back they have come to enjoy.

While credit unions and banks rely on retailers to pay a very small fee (typically 2% of a transaction) to help with the fraud protection of accounts, big-box retailers would prefer the cheapest, often less secure payment processors to control the market.

We know that reduced interchange income will result in less time and fewer resources allocated to protecting members from fraud, issuing replacement cards, and investing in the latest security. Everyone has a role in protecting consumer data, and this legislation does not take this into consideration.

To make matters worse, now there are efforts to attach this credit card legislation to the National Defense Authorization Act, otherwise known as the NDAA. Attaching non-defense legislation to the defense spending bill is a disservice to our military members and their families.

At Space Coast Credit Union, we pride ourselves on our military background and our unparalleled ability to serve those who defend and protect us. We were chartered in 1951 as Patrick Air Force Base Credit Union to serve as a savings institution and create a source of credit for military personnel stationed at the base.

While our name has changed as our footprint has expanded, our mission has remained the same. We exist solely to serve members.

At this time, we have a full-service branch at Patrick Space Force Base and two additional ATMs. We are proud to offer low-cost, responsible financial services to members across Florida’s east coast, from Flagler to Miami-Dade counties.

Efforts to force expensive routing mandates onto Americans, especially through defense legislation, should raise serious concerns. The fact that this legislation has never even been vetted by the appropriate Senate Banking or House Financial Services committees is further proof of how desperate supporters of this legislation truly are.

Historical data proves this legislation is ineffective and unsuccessful at bringing down consumer costs. Rather than proposing new routing mandates that will further hurt consumers at a time when they are already struggling, Congress should preserve the ability for consumers to access affordable credit and rewards programs at community institutions like Space Coast Credit Union.

ABOUT THE AUTHOR

Timothy M. Antonition is the President and CEO of Space Coast Credit Union, where he has worked to support and grow membership for more than 30 years. He was the credit union’s executive vice president and chief operating officer and is a 30-year credit union veteran, having joined SCCU in 1992. His impressive career has been marked by numerous promotions and accomplishments.

Antonition has his Bachelor of Science from the Florida Institute of Technology and a Master’s in Business Administration from the University of Central Florida.

Space Coast Credit Union was chartered in 1951 and is headquartered in Melbourne, Florida. The credit union serves more than 580,000 members with assets of over $8 billion through a network of 65 branches and over 85 ATMs located throughout Florida and through its website sccu.com.

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