Peach Tree Times

A representative of the Georgia Bankers Association (GBA) said that pending federal credit card regulations would negatively impact consumers by reducing competition and jeopardizing credit card security.

The bill, S. 1838, or the “Credit Card Competition Act” (CCCA, S. 1838), would require banks to offer merchants at least two network options, one of which cannot be Visa or Mastercard, for processing credit card transactions. Opponents to the bill argue that if given the choice, retailers would likely choose cheaper, less secure networks for processing transactions, thereby exposing consumers to increased securities and fraud risks.  

"The Georgia Bankers Association strongly opposes the Credit Card Competition Act," Katina Weiss, GBA's marketing and communications manager, told Peach Tree Times. "We believe it would harm consumers, reduce competition, and negatively affect banks."

"The bill would jeopardize credit card security by forcing banks to use potentially less secure networks, increasing the risk of fraud and compromising consumer data," said Weiss.

Weiss shared a letter to Congressional leadership that her organization signed in September 2023 calling S. 1838 an "anti-consumer, anti-competitive" bill that is a "cynical attempt by the largest global merchants and biggest grocery chains to obtain a subsidy for themselves at the expense of smaller competitors and consumers."

"Make no mistake: this bill was specifically written to deliver a major payday for big retail and big grocery at a time that these giant retailers have been getting even bigger, increasing their profits, and raising prices on American consumers," said the letter.

Weiss said the GBA has communicated the organization's opposition to S. 1838 to both of Georgia's U.S. Senators, Jon Ossoff (D) and Raphael Warnock (D).

She also said the legislation would "jeopardize credit card security by forcing banks to use potentially less secure networks, increasing the risk of fraud and compromising consumer data."

Georgia ranked No. 3 in the country for per-capita credit card fraud reports in 2023, reported Peach Tree Times in April. 

Glenn Grossman, the Director of Research at financial advisory firm Cornerstone Advisors, concurred that if the CCCA is passed, it could lead to an increase in credit card fraud.

“If the CCCA were to be approved, the routing of credit card transactions would move from a ‘single pipe’ to ‘multiple pipes’ of data flowing from merchants to issuers,” Grossman told Federal Newswire.

“Today, card issuers depend on the networks to profile and identify fraud. They see all the transactions on their network and have developed fraud detection capabilities that would not be possible in a fragmented structure the CCCA would create,” Grossman said.

Grossman added that Visa has invested billions on fraud detection.

“The investment builds trust and in return consumers use their credit cards,” said Grossman. "Zero liability means something to consumers. With the CCCA, it is possible that promise is gone."

In a report released in July 2023, “The True Impact of Interchange Regulation: How Government Price Controls Increase Consumer Costs and Reduce Security,” Grossman wrote that studies show 79% of consumers choose credit cards as a payment option because of their data security.

Grossman said that, under the legislation, credit card authorizations would be allowed to flow across many “pipes” which would eliminate much of the “fraud fighting value that Visa and MasterCard have implemented.”

The bill would not require new networks to provide fraud detection, Grossman explained.

“It is expected these new networks would rather just route data, not ensure the authorization is legitimate. It is a fraudster’s dream come true!” he said.

The Federal Trade Commission reported receiving 114,348 complaints of fraud in which the payment method was credit card in 2023. Those fraud complaints accounted for $246.1 million.

The FTC also reported receiving 416,582 reports of credit card identity theft in 2023.

The bill is currently pending before the Senate’s Committee on Banking, Housing and Urban Affairs.

Where did your state rank in 2023 rank for credit card reports per capita?

Source: WalletHub / Federal Trade Commission data

State	Credit Card Fraud Reports per Capita
Florida	22.01
District of Columbia	21.76
Georgia	19.59
Nevada	18.3
California	16.08
Delaware	15.95
Pennsylvania	15.06
Texas	13.37
Maryland	13.05
South Carolina	12.79
New York	12.65
Louisiana	12.51
New Jersey	12.46
Illinois	12.44
Arizona	11.21
Alabama	10.62
Massachusetts	10.01
Michigan	9.52
North Carolina	9.52
Connecticut	9.41
Mississippi	8.98
Virginia	8.95
Ohio	8.86
Colorado	7.78
Rhode Island	7.77
Indiana	6.95
Tennessee	6.68
Nebraska	6.09
Kansas	6.04
Washington	5.8
Arkansas	5.75
Missouri	5.66
Oregon	5.53
New Hampshire	5.48
Wisconsin	5.41
Utah	5.08
Minnesota	5
Oklahoma	4.89
Hawaii	4.8
Iowa	4.69
Kentucky	4.3
New Mexico	4.29
North Dakota	4.22
Idaho	4.02
Wyoming	3.82
Maine	3.78
Montana	3.76
Alaska	3.64
West Virginia	3.63
Vermont	3.49
South Dakota	3.33