The following content is sponsored by the Electronic Payments Coalition.
We’ve heard the news inflation is finally starting to go down but prices remain stubbornly high. American families are being squeezed not for occasional splurges but just to purchase everyday essentials.
CBS News’ price tracker shows how the cost of basic necessities like food, shelter and transportation has increased dramatically since 2019. Whether from buying groceries or indulging in the occasional takeout meal, Americans spend 11 percent of their total income on food, the highest percentage since 1991.
While everyday Americans struggle to make ends meet and put food on the table, corporate retailers are plotting ways to increase their profit margins.
The Federal Trade Commission (FTC) released a report earlier this year highlighting how grocery conglomerates exploited the COVID-19 pandemic to inflate prices of essential items and boost revenue profits, regardless of the financial difficulties many Americans were experiencing at the time.
According to the report’s findings, retail grocery stores, such as Kroger, Walmart, and Amazon, saw revenues rise and the FTC stated the findings “cast doubt on assertions that rising prices at the grocery store are simply moving in lockstep with retailers’ own rising costs.”
Instead of accepting responsibility, these corporate megastores are shifting blame to credit card companies, touting price increases as their reasoning to push new credit card mandates. Spearheaded by Senators Dick Durbin (D-IL) and Roger Marshall (R-KY), a harmful credit card bill is being pushed in Congress to further line the pockets of large retail conglomerates.
The Durbin-Marshall credit card legislation seeks to introduce further regulation, allowing retailers the freedom to route their establishment’s credit card transactions through alternative payment networks, enabling them to bypass the established and safe payment systems financial institutions currently have in place. This proposed bill plans to modify the current routing system and consequently allow corporations to profit more, all without passing savings on to their own customers.
Historically, similar policies have backfired against the average household quickly and harshly. In 2010, Congress passed the Durbin Amendment, requiring the Federal Reserve to cap interchange for debit card purchases and putting billions of dollars in the hands of large corporate retailers. They promised consumers would see these savings returned to them, but a study from the Federal Reserve Bank of Richmond showed that more than 98 percent of businesses either raised or kept their prices the same, despite the interchange adjustment. Another study from the University of Chicago found that families lost roughly $25 billion after the 2010 Durbin Amendment was enacted.
We’ve been through this before. Congress should reject this credit card bill and protect the livelihood – and wallets – of the American families they represent before it’s too late.
