K-STREET, 10,000 FEET: Sen. Tillis and others warn: Durbin’s Credit Card Competition Act sinks GENIUS
THE LOWDOWN:
The GENIUS Act is a bipartisan legislative effort aimed at establishing a comprehensive framework for stablecoin regulation, but congressional sources tell the Washington Reporter that a last-minute “poison pill” amendment may cause a delay or prevent the bill from becoming law.
For more than a decade, Sen. Dick Durbin has pushed legislation to overhaul the credit card industry: successfully in the debit space with the Durbin Amendment to Dodd-Frank, and, thus far, unsuccessfully in the credit space with the Credit Card Competition Act (CCCA).
A congressional aide explained to the Reporter that the CCCA “is a poison pill trick to kill the GENIUS Act.”
“If it were to be adopted in GENIUS, I would withdraw my support on the Senate floor,” Sen. Thom Tillis said.
The GENIUS Act is a bipartisan legislative effort aimed at establishing a comprehensive framework for stablecoin regulation, but congressional sources tell the Washington Reporter that a last-minute “poison pill” amendment may cause a delay or prevent the bill from becoming law.
Championed by Sens. Bill Hagerty (R., Tenn.), Cynthia Lummis (R., Wyo.), and a coalition of senators focused on advancing America’s leadership in blockchain technology, the GENIUS Act has garnered significant support from across the aisle and in the crypto industry.
However, Congressional officials warn that there may be one final major hurdle to passing the GENIUS Act — a “poison pill” amendment backed by Sen. Dick Durbin (D., Ill.) to overhaul the credit card industry.
For more than a decade, Durbin has pushed legislation to overhaul the credit card industry: successfully in the debit space with the Durbin Amendment to Dodd-Frank, and, thus far, unsuccessfully in the credit space with the Credit Card Competition Act (CCCA).
The CCCA is a controversial bill that effectively sets price controls on credit card interchange fees, mandating that merchants be offered multiple network options for processing transactions. Proponents, including big-box retailers, claim this would lower costs for consumers by allowing merchants, instead of consumers, to decide which network to process a payment on.
Conservative critics, however, argue the CCCA would be a handout to large retail stores and progressive credit card companies — such as American Express and Discover (which are exempt from the bill) — and devastate credit card rewards programs.
Historical precedent supports these concerns: Durbin’s debit reform led to the near-elimination of free checking accounts, with negligible consumer benefits.
A congressional aide explained to the Reporter that the CCCA “is a poison pill trick to kill the GENIUS Act.”
“It won’t pass the House and it won’t become law,” the aide said. “Congress worked extremely hard to get GENIUS this far and it will be a huge win for President Trump, so Republicans are focused on stopping Durbin from derailing this to continue his credit card crusade.”
Sen. Thom Tillis (R., N.C.), a key supporter of the GENIUS Act, issued a stark warning against attaching the Credit Card Competition Act to the stablecoin bill.
“If it were to be adopted in GENIUS, I would withdraw my support on the Senate floor,” Tillis said.
