On Tuesday November 19, the Senate Judiciary Committee held a hearing entitled Breaking the Visa-Mastercard Duopoly: Bringing Competition and Lower Fees to the Credit Card System.

The Credit Card Competition Act (CCCA) is legislation led by Committee Chairman Senator Richard Durbin (D-IL) and Sen. Roger Marshall (R-KS) that would require the largest credit card issuing financial institutions in the country—those with assets over $100 billion—to enable at least two unaffiliated credit card networks to be used to process credit card transactions. If passed, this legislation would have a direct impact on small and independent breweries, especially taprooms and brewpubs which are required to accept credit cards to meet customer demand.

In 2010, the Durbin amendment was included in the Dodd-Frank Wall Street Reform and Consumer Protection Act, giving the Federal Reserve the ability to cap the interchange fees charged to merchants when a customer used a debit card. The enactment of this legislation resulted in different fees for processing credit card and debit card transactions. The CCCA seeks to change what networks cards are processed on but does not cap fees.

Chris Callahan of Battenkill Books in Cambridge, New York and Doug Cantor, general counsel from the National Association of Convenience Stores, testified in support of the CCCA. Other participants were Linda Kirkpatrick, president, Americas at Mastercard; Bill Sheedy, senior advisor to CEO, Visa Inc.; and Roger Alford, a professor of law at the University of Notre Dame Law School.

Interchange fees (also known as swipe fees) are usually a difficult topic on Capitol Hill, forcing members of Congress to choose between supporting small businesses like breweries and large corporations like financial institutions and credit card companies, but the recent hearing showed bipartisan support leaning in favor of small businesses and consumers.

Chairman Durbin brought up the fact that credit cards are regulated in Europe and companies like Visa and Mastercard accept a capped interchange fee of 0.3% compared to the United States average rates of 3%. Sen. Welch (D-VT), another co-sponsor of the bill, stated that value, security, and consumer confidence are good things that credit card companies provide but said that “it does not justify the rip-off prices.”. Lindsay Graham (R-SC) stated, “I’m not sure how I’ll come out [on the legislation], but you’re having a hard time convincing me that the fees are set to the advantage of the consumer.”

The hearing was positive, but the CCCA still has an uphill battle in the 118^th Congress which is in its “lame duck” session, meaning only a few pieces of legislation will get passed before the end of 2024. The Brewers Association is working with a broad coalition of associations to support including the bill in a year-end package. Even if the legislation doesn’t pass, breweries can expect this or similar legislation to be introduced in the new congress.