Washington, DC — As opponents of the Credit Card Competition Act (CCCA) argue the pending settlement of private antitrust litigation against Visa and Mastercard “eliminates the need for legislative action on credit interchange”—and make similar claims of the proposed Capital One-Discover Merger—the American Economic Liberties Project and a coalition of nine labor, consumer, small business, and competition advocates today sent a letter to the Senate Banking and Judiciary committee leaders, calling for a hearing on the CCCA and reiterating the need for its passage.

“The bank lobby’s claims that this settlement and the Capital-One Discover Merger will increase competition and lower credit card swipe fees are entirely misleading,” said Morgan Harper, Director of Policy and Advocacy at the American Economic Liberties Project. “Neither of these developments significantly change the anticompetitive dynamics plaguing the credit card payments market, costing consumers and small businesses billions annually. To truly change the the market structure and lower interchange fees, Congress should hold a hearing and pass the CCCA.”

In March, a proposed settlement was released to resolve litigation by merchants against Visa and Mastercard for colluding on charging credit card swipe fees. While the networks have trumpeted the settlement as putting to rest concerns about their fee rates, the settlement in fact would only temporarily and minimally reduce interchange fees, fails to address network fee increases, and crucially bars merchants from making future claims against Visa and Mastercard, as Economic Liberties and allies pointed out in a Letter of Objection to the settlement.

In their proposed merger with Discover, Capital One has also claimed the combined corporation would compete with the Visa and Mastercard duopoly and reduce swipe fees. Even taking the merge-to-compete argument at face value, there is little reason to believe Capital One will scale-up Discover as a true competitor network to Visa and Mastercard. As Economic Liberties’ transaction analysis reveals, Capital One executives plan to migrate only a “relatively small portion” of credit volume to the Discover network within three years, part of a long-term process that will happen in “small steps.” Specifically, Capital One’s stated goal is to move $175BN in total spending volume to Discover by 2027. Even if it met this goal entirely with credit volume and zero debit volume, it would only cut into Visa-Mastercard’s market share by a marginal .033%. Capital One has indicated no plans to open up the Discover network to other issuers if the merger is successful. All of this suggests Visa and Mastercard’s duopoly will remain and the CCCA is needed.

Read the full letter here.

Read the full Settlement Objection here.

Read Economic Liberties’ Fact Sheet on the CCCA here.

Learn more about Economic Liberties here.

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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.