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Economic development has always been near and dear to my heart. Helping our economy grow strong is one of the reasons I ran for the West Virginia House of Delegates, and it is something that I take very seriously.
Sometimes expanding our economy means that I must support state bills and sometimes it means that I must oppose others that I think will hurt expansion and growth. And sometimes it means that I must either support or oppose federal legislation.
That is the case in this instance. Today I am writing about the Credit Card Competition Act and the damage it will do to our economy and to economic expansion in this state and the counties I represent. I ask that our leadership in Washington, D.C. strongly oppose this bill.
Every time you swipe your credit card, money is routed almost instantaneously from the credit issuing bank to the merchant on a payment processing network. Consumers can choose a credit card knowing exactly which network their payment is processed on. If passed, the Credit Card Competition Act would establish a routing mandate and allow credit card purchases to be processed on alternate payment networks. This would reduce the funds that card-issuing banks use to invest in consumer benefits and make credit cards widely accessible.
If the credit card issuing banks lose this revenue, then they will be forced to become much more selective when it comes to whom can obtain credit. Many of those who currently qualify for credit cards could fall outside of the requirements to obtain credit. This will be at no fault of their own. They will not lose access to credit because they didn't pay their bills.
No, they will lose access to credit because of federal legislation that is being passed to benefit greedy corporate retailers. They are the ones who can really take advantage of this bill and pad their bottom lines. This will hurt families around the country that will no longer be able to use credit cards to make emergency, unplanned purchases or to shop for their loved ones for Christmas.
Having fewer credit cards in circulation will also hurt our economy and small businesses. That is because people spend more when they have access to credit. Take away a portion of the credit cards in circulation and people will be spending less in our small mom and pop shops throughout West Virginia. West Virginia's economy is powered by small businesses, and they operate on a much smaller profit margin that larger companies. Taking away customers could force these businesses to close, leaving our local economy in shambles.
Lastly, the revenue generated by the current credit card system is also used to fund the rewards points system. These rewards points are often redeemed for travel, including airline tickets. The airlines receive a large chunk of their revenue from redeemed rewards points. That is why the major airlines like United and Southwest oppose the Credit Card Competition Act, and it is why the West Virginia Airport Managers Association opposes it as well.
This is an issue that really hits home for me. I am a member of the Economic Development and Tourism Committee and leaders throughout the state have been working hard to expand our tourism industry. We have a lot to offer to tourists, especially with the New River Gorge being named a national park.
Passing the Credit Card Competition Act will hurt our efforts to grow tourism and expand airline service in this state.
With all the negative effects of this bill, why is it being proposed?
It is being proposed by Illinois Sen. Dick Durbin to save large box retailers billions of dollars in revenue. This will come at the expense of everyone else. Sen. Durbin has been trying to pass this bill for years and he will make another effort at the start of 2024. I hope our senators stand against it.
W.Va. Delegate Jimmy Willis is a Republican representing Brooke County.