Republican pro-business group pushes back against congressional bid to ‘ban’ credit card reward points.
With the launch of a seven-figure advertising campaign opposing the “one-off ban” proposal featured in the Credit Card Competition ActAmerican Free Enterprise Action (AmFree Action) aims to educate the public, as well as lawmakers, about the ramifications of the measure.
Set in the fictional town of “Point Less, Kansas,” ads released this month highlight residents whose livelihoods have been impacted by the loss of credit card rewards points — a fate that, according to the group, could soon be a reality for millions of Americans if the legislation becomes law.
The three ads depict a range of scenarios for people who are forced to live without credit card rewards points, including a local hotel and airport that has apparently been abandoned by travelers and guests.
“Would you like to live in a world without points? asks the narrator before presenting each scenario in two 30-second commercials.
Another extended commercial released by the group, which is nearly five minutes long and titled “Point Less America”, provides insight into the city and its struggles without reward points “of any kind.”
The city’s fictional mayor, “Little Aaron Abbotson”, is featured in the advertisements, who is re-elected “every subsequent year” because “even without points, someone has to win”.
Additionally, the long-running ad features a candy store and restaurant struggling to hold on due to lost rewards points and perks from credit card companies.
The ads are expected to air nationwide over the next few weeks on streaming platforms like Hulu and Roku, social media, YouTube, Reddit and more.
“Millions of American families and businesses rely on their credit card benefits for travel, dining, shopping and cash back,” said Gentry Collins, CEO of the American Free Enterprise Chamber of Commerce. . “The Credit Card Competition Act would deprive American consumers of billions of dollars a year in benefits, resulting in less travel and less spending. It will also hurt the millions of American small business owners and local towns that depend most on these benefits.”
Democratic Senator Dick Durbin of Illinois, joined by co-sponsor Republican Sen. Roger Marshall of Kansas, introduced the Credit Card Competition Act to the Senate in late July.
According to a measurement summarythe bill aims to “address network access and competition in electronic credit transactions”.
“The bill generally prohibits credit card issuers from restricting the number of payment card networks on which an electronic credit transaction can be processed,” the summary states. “Specifically, the Board of Governors of the Federal Reserve System must prohibit certain credit card issuers with assets of more than $100 billion from limiting the number of networks on which credit card transactions can be processed to a network, two or more networks operated by affiliated networks or individuals, being the two networks with the largest market share of credit cards issued.
In addition, the measure states that “credit card issuers are prohibited from imposing certain limitations on the routing of electronic credit transactions, such as penalties for failing to meet a specified threshold of transactions on a particular payment card network”.
Despite no mention of the elimination of rewards or credit card points in the text of the measure, Alex Sanchez, president and CEO of the Florida Bankers Association, argued in a Fox Business Opinion Piece that the bill, if it becomes law, “would effectively eliminate consumer choice by allowing retail chains to route their customers’ transactions through the cheapest credit card network, regardless of security capabilities or reward offers”.
“In a free market economy, customers select their credit cards based on a range of factors, including the benefits and protections they offer. And they assume those benefits and protections will be honored each time they will use their credit card to make a purchase. But if that’s the case today, the [bill] would allow retailers to bypass their customers’ preferred networks — those to which their rewards, benefits, and security protections are tied — to select the cheapest and likely least secure network,” Sanchez said.
Proponents of the measure, however, say the bill would have no impact on credit card rewards.
“The most prevalent claims are that the CCCA would somehow deprive consumers of their credit card rewards and that the bill could jeopardize credit card security. Neither one neither is true,” Mario H. Lopez, president of the Hispanic Leadership Fund, said in a recent opinion piece for The Hill.
“First, the CCCA components have nothing to do with the rewards, which are actually entirely determined by the banks that issue the cards, not the networks that process the transactions,” he added. “The CCCA is not changing this structure. Additionally, the $11 billion in projected swipe fee savings represents less than 10% of the $138 billion in annual swipe fee revenue, maintaining a great leeway for the cost of rewards and still does not threaten the immense profits for the credit card behemoths.”