New Durbin-Marshall Credit Card Amendment Would Break the Bank—and the Courts

For years, Senators Dick Durbin (D-Ill.) and Roger Marshall (R-Ks.) have pushed hard for the Credit Card Competition Act (CCCA), even though the misguided proposal would erase millions of Americans’ credit card rewards. Now, a last-minute maneuver by the two lawmakers makes matters even worse, dramatically escalating the threat posed by their long-running credit card mandate. Taxpayers and consumers would pay the price not just for credit card mandates, but for a lawsuit free-for-all that would raise costs for millions of families and businesses.

Rather than advancing their proposal through regular order and letting the CCCA be debated on its own merits, the senators have filed an entirely new version of the proposal as an amendment to the Digital Asset Market Structure and Investor Protection Act, commonly known as the Clarity Act—legislation intended to address digital asset market structure. This move should concern all Americans, and all lawmakers. But the substance of the amendment is even more troubling.

The revised Durbin-Marshall language imposes even more costs on the American people by empowering state attorneys general (AGs) with sweeping new enforcement authority. Specifically, it grants parens patriae authority, allowing state AGs to sue banks and credit unions on behalf of residents—even in the absence of direct harm. In practice, this would enable state-run class actions, massive damages claims untethered from actual consumer injury, and injunctive relief that could force nationwide changes through a single state’s enforcement action. As Consumer Action for a Strong Economy notes, “These cases could seek enormous financial penalties and court-ordered mandates with nationwide impact—all driven by enforcement priorities set in state capitols, not by consumers or market forces. The result is a system that rewards litigation over innovation and politics over consumer choice.”

This is not consumer protection. It is lawfare.

Under this new structure, activist AGs would be incentivized to bring politically-motivated lawsuits against financial institutions, extracting billions of dollars and directing how those funds are spent. The result would be a litigation-driven slush fund controlled by partisan officials, funded by America’s banking system, and ultimately paid for by consumers. These state lawsuits would come at a tremendous cost to taxpayers. Hourly rates per attorney easily total hundreds of dollars when states inevitably bring private firms into their cases. Taxpayers will be footing the bill for exceptionally-costly lawsuits with zero consumer interest.

The consequences would be immediate and widespread. More than 200 million Americans rely on credit card rewards—cash back, travel points, and airline miles—to help manage household budgets and offset rising costs. Credit card mandates coupled with an AG lawsuit bonanza would drastically reduce or eliminate those benefits, while offering no meaningful savings in return. Additionally, fraud rates would dramatically increase as safety investments into payment networks go by the wayside. In fact, Texas A&M researchers estimate a doubling of fraud rates from 2021 levels.

Even proponents do not claim consumers will see lower prices, because any interchange changes flow to mega-retailers, not families. After all, the “Dubin Amendment” to the 2010 Dodd–Frank Wall Street Reform and Consumer Protection Act, which foisted restrictions on debit cards with a similar aim to the CCCA, did not lower fees. The vast majority of merchants—who the Durbin Amendment was designed to help—did not report lower costs or debt. One might think this would have taught Sens. Durbin and Marshall the folly of the government micromanaging the economy. One would be wrong.

Community banks, credit unions, free-market organizations, and—of course—millions of credit card consumers across the country are rightly concerned about credit card mandates and witch-hunts in the courtroom. They recognize this one-two punch for what it is: heavy-handed government intervention that rewards the largest retailers, empowers activist enforcers, and undermines competition, innovation, and consumer choice. Taxpayers and consumers benefit when the government stays out of the way, not when it pursues yet another costly policy that would break the bank.