In Washington, D.C., the hardest thing to kill is a bad idea.
And one of the worst will soon be back: The Durbin-Marshall credit card mandates.
This legislation, sponsored by U.S. Sens. Dick Durbin (D-Ill.) and Roger Marshall (R-Kan.) is a job killer and would impose a government takeover of the credit card system. Championed by the same corporate megastores and grocery conglomerates who raised prices and manipulated the supply chain during the pandemic, the proposed anti-growth mandates in the legislation threaten the secure and convenient payment system consumers and small businesses rely on every day.
The result would be an economic decline and loss of American jobs.
How bad is it? Economic analysis from Oxford Economics Research, an independent advisory firm, found that this bill could cost the U.S. economy $228 billion and 156,000 jobs.
Fortunately, the bill was blocked in 2022 and 2023 by bipartisan opposition. It’s also opposed by consumer groups, unions, mom-and-pop businesses and the local financial institutions that serve them.
The bill is also opposed by the tourism industry, which are economically vital to the economies of states like Arizona, Colorado, Florida, Hawaii, Nevada and New York. Why? Because one of the first things to go if this bill passes would be rewards programs.
About seven in 10 Americans have a credit card with rewards and airline, hotels, car rental, and dining are the most popular categories of spending and redemption.
Cash back reward programs are the most popular, but cardholders also rely on travel reward programs when booking their next vacation or trip to see loved ones. In 2022, miles accrued from airline credit cards alone paid for an estimated 15 million domestic visitor trips that supported $23 billion in economic activity.
It’s not only hotel chains or airlines that benefit from consumer travel, but also thousands of small businesses from local restaurants to the sandwich shops and go-kart tracks at the beach. Many Americans rely on tourism to stay employed.
It’s well known in the travel industry that winter can be a dry spell for beach or lake destinations. Can you imagine if winter never ended? The crowds never came back? It would be devastating – for workers but local economies more broadly because the taxes tourists pay at restaurants, hotels, gas stations or amusement parks help fund everything from local schools to highway and hospital improvements.
The last thing Washington wants, on either side of the partisan aisle, is to kick off 2025 with an economic slowdown. After years of persistent inflation, Americans remain cautious about their spending and are relying on reward points to make a family vacation – that might have been put off – affordable.
Those trips matter: The latest numbers show travel was responsible for about $1.2 trillion in direct spending. That spending led to an overall economic footprint of $2.6 trillion.
And it’s not just tourist destinations that will be impacted. The research out of Oxford shows that, if this bill passes, discretionary spending would likely be down across the board—to the tune of $80 billion. That is hundreds of dollars down for every household. There would be less money for movie tickets, ordering pizza, buying clothes, or anything non-essential. This will impact every town, every state, and every person.
For the last year and a half, I’ve had the pleasure of leading the Electronic Payments Coalition, a diverse group that represents the credit unions, community banks, payment card networks, and institutions that work together to support our electronic payments system.
But I’ve been around D.C. for much longer, and I have seen the impact of poorly thought-out laws like this.
When this bill inevitably pops up, our leaders need to remember the 156,000 jobs these mandates will erase. They need to remember their constituents who rely on credit card rewards. My hope for 2025 is that politicians see this bill again and remember what it will cost.