Durbin Calls on CEOs of Visa, Mastercard, United Airlines, and American Airlines to Testify Before the Judiciary Committee Regarding Credit Card Competition

WASHINGTON – U.S. Senate Majority Whip Dick Durbin (D-IL), Chair of the Senate Judiciary Committee, today sent letters to the CEOs of Visa, Mastercard, United Airlines, and American Airlines inviting them to testify at a public hearing regarding competition in the credit card market.

Durbin said, “Visa and Mastercard have aggressively opposed efforts to bring competition to the credit card market in order to protect the dominant market position they share.  Visa, Mastercard, and its allies have spent millions of dollars opposing my Credit Card Competition Act, including through false and misleading advertising claiming the bill would ‘ban’ credit card rewards programs.  At the same time, both American Airlines and United Airlines have aggressively opposed efforts to bring competition to the credit card market in order to protect the billions of dollars in windfall profits their companies collect through their co-branded credit cards.  These airlines have become credit card companies that fly planes.”

Durbin continued, “Particularly given Visa, Mastercard, United Airlines, and American Airlines’ self-proclaimed personal engagement in this issue, it is critical that the Committee, and the American people, hear directly from their CEOs in defense of a status quo that allowed Visa and Mastercard to levy a total of $93 billion in credit card fees on consumers, small businesses, and others in 2022 alone.”

The Senate Judiciary Committee invited the following four CEOs to testify:

• Ryan McInerney, CEO of Visa
• Michael Miebach, CEO of Mastercard
• Scott Kirby, CEO of United Airlines
• Robert Isom, CEO of American Airlines

Visa, Mastercard, American Airlines, and United Airlines have aggressively spoken out against Durbin’s Credit Card Competition Act, bipartisan legislation he introduced with U.S. Senator Roger Marshall, M.D. (R-KS), that would enhance competition and choice in the credit card network market, which is currently dominated by the Visa-Mastercard duopoly.  Building off of debit card competition reforms enacted by Congress in 2010, the Credit Card Competition Act would direct the Federal Reserve to ensure that the largest credit card-issuing banks offer a choice of at least two networks, one of which must be a network other than Visa and Mastercard, over which an electronic credit transaction may be processed.  U.S. Senators Peter Welch (D-VT) and J.D. Vance (R-OH) also joined Durbin and Marshall in introducing the legislation, which is estimated to save merchants and consumers $15 billion each year.

Visa and Mastercard wield enormous market power in credit cards; according to the Federal Reserve, they account for nearly 576 million cards, or about 83 percent of general-purpose credit cards.  Visa’s and Mastercard’s market power and network structure have enabled them to impose fees on U.S. merchants that are among the world’s highest, charging a total of $93 billion in credit card fees in 2022.   These fees include interchange or swipe fees which Visa and Mastercard require merchants to pay to issuing banks, as well as network fees that Visa and Mastercard require merchants to pay directly to them.  Consumers ultimately pay for all of these fees in the price of the goods and services they buy.  Interchange fees are the second largest cost for many small businesses—only behind labor costs.

Visa and Mastercard have also recruited allies, including some in the airline industry, to breathlessly claim that the Credit Card Competition Act would make frequent flyer rewards programs disappear.  The airlines have negotiated sweetheart deals with the biggest Wall Street banks at the expense of consumers and small businesses for years.  The European Union put a hard cap on credit card swipe fees at .3% and their banks and airlines still offer points and miles programs.

In October, Durbin and Marshall requested information from the U.S. Department of Transportation (DOT) and the Consumer Financial Protection Bureau (CFPB) about the actions they are taking to protect consumers against unfair and deceptive practices in airlines’ frequent flyer and loyalty programs.

Full text of the letter to the CEO of Visa is available here.

Full text of the letter to the CEO of Mastercard is available here.

Full text of the letter to the CEO of United Airlines is available here.

Full text of the letter to the CEO of American Airlines is available here.

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