By Kim Morgan, SERVPRO of Anson, Stanly and Union Counties
As a small business owner serving Anson, Stanly and Union counties, I understand firsthand how important a safe, reliable and accessible financial system is to the businesses and families that keep our communities moving. At SERVPRO, our team helps homeowners and businesses recover after fires, floods, storms, mold and other disasters. When someone calls us, they are often experiencing one of the worst days they have had in years, and they need us to respond quickly. That is why I traveled to Washington, D.C., last week to meet with members of North Carolina’s congressional delegation and ask them to oppose the Durbin-Marshall Credit Card Competition Act.
Supporters say the proposal will increase competition and lower costs for merchants, but Congress should examine what happened the last time Washington intervened in the card-payment system. The original Durbin Amendment imposed price caps on debit-card interchange fees for covered institutions. Research from the Federal Reserve Bank of Richmond later found that the effects on merchants were limited and uneven: roughly two-thirds reported little or no change in their debit-card acceptance costs, about one-quarter reported higher costs, and fewer than 10 percent reported lower costs. Merchants that experienced higher costs generally passed them along through higher prices, while relatively few merchants that saved money reduced their prices. For small businesses like mine, that history should give Congress reason to proceed cautiously.
There are also important questions about what Durbin-Marshall could mean for the community banks and credit unions that serve places like Anson, Stanly and Union counties. These institutions do more than process transactions. They finance homes, help entrepreneurs start businesses, provide working capital and keep money circulating in our communities. The current legislation targets certain large credit-card issuers, but the experience following the original Durbin Amendment has fueled concerns about broader effects throughout the financial system. If changes to the payments marketplace ultimately reduce access to affordable credit, increase banking costs or weaken services available to consumers and small businesses, communities outside the nation’s largest metropolitan areas could feel those consequences particularly strongly.
Security matters, too. Every day, businesses like mine depend on payment networks to process transactions quickly while protecting customers from fraud and unauthorized charges. The Congressional Research Service has noted that the debate over credit-card routing involves real tradeoffs: proponents argue additional network competition could lower merchant costs, while concerns include potential effects on fraud, rewards, consumer credit and the broader economics of card issuance. Those questions deserve careful consideration before Congress restructures a payment system relied upon by millions of American businesses and consumers.
Small businesses do not need Washington experimenting with a system that allows us to serve customers safely and efficiently without clear evidence that the promised benefits will reach the people they are intended to help. I appreciated the opportunity to travel to Washington and share the perspective of a North Carolina small business directly with our congressional delegation. I hope our representatives will listen to businesses, community banks, credit unions and consumers across our state, examine the lessons of the original Durbin Amendment, and oppose the Durbin-Marshall Credit Card Competition Act. North Carolina’s small businesses need policies that expand opportunity and strengthen our communities—not mandates that could create new costs and uncertainty for the people we serve.