Far from improving affordability, the Durbin-Marshall mandates and proposed interest rate caps risk shrinking consumer choice and increasing out-of-pocket costs at a time when Americans can least afford it.

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Whenever federal bureaucrats and politicians propose new regulations in the name of “consumer welfare,” Americans should assume an even higher state of vigilance.  

In such circumstances, consumers themselves typically pay the heaviest price.  

That’s precisely why regulatory proposals under the banner of consumer welfare perfectly illustrate Ronald Reagan’s observation that, “The nine most terrifying words in the English language are: ‘I’m from the government, and I’m here to help.’”  

The latest occasion for that reminder arrives in the form of proposed “credit card reform” in Congress that would negatively affect American consumers without offering the benefits that proponents claim.  

Specifically, the so-called Credit Card Competition Act – more colloquially known as the Durbin-Marshall credit card mandates – would introduce massive structural changes in how credit card transactions are processed by merchants, but with no benefits to consumers.  The proposal has repeatedly failed to pass as a standalone bill year after year.  In 2025, for instance, Senators Durbin and Marshall desperately attempted to attach their legislation to other bills like the GENIUS Act, but Congress refused to accept those mandates.  

Now, however, proponents seek to sneak it through by attaching it to other must-pass legislation or reintroducing it as a standalone bill in 2026.  

Here’s what’s at stake.  

Currently, when banks issue consumers credit cards, merchants process consumers’ purchases through those banks’ secure network systems, keeping consumers’ financial data safe.  The Durbin-Marshall credit card mandates would upend that longstanding and functioning system by forcing banks to begin offering multiple networks from which merchants could choose to process credit card transactions.  Merchants could subsequently choose cheaper but less-secure networks as a means to theoretically reduce fees through “increased competition.”  Whatever theoretical savings were achieved, however, wouldn’t likely be passed on to consumers.    

Recent history confirms that unlikelihood.  

Nearly two decades ago, Senator Durbin’s namesake Durbin Amendment to the Dodd-Frank Act capped swipe fees on debit cards under an argument identical to today’s:  merchants would supposedly save money on transactions and pass those savings on to consumers.  In reality, as even the Progressive Policy Institute concludes, only approximately 1.2% of merchants actually passed savings to consumers at checkout after the debit fee cap took effect, while 21.6% raised prices instead.  Over a decade later, consumers haven’t experienced meaningful benefit.  

That’s a humbling reality check for proponents of the Durbin-Marshall credit card mandates.  

After all, why would new market-disrupting mandates on credit cards, similar to what we experienced with debit cards, somehow deliver dramatically opposite outcomes this time around?  Indeed, the International Center for Law & Economics predicted that merchants would likely pocket lower processing costs – assuming they even occurred – without ever lowering consumer prices.  

Another potentially catastrophic problem would specifically impact consumers who use and rely upon credit card rewards.  Namely, those airline miles, cash back and points programs on which tens of millions of Americans rely are funded largely by interchange fees.  Consequently, analysts warn that the Durbin-Marshall credit card mandates could eviscerate many of those consumer rewards programs.  

It’s important to emphasize, moreover, that those familiar credit card perks aren’t simply for wealthy jetsetters.  Quite the contrary, data shows that over three-quarters of cardholders with household incomes under $50,000 possess active rewards cards.  Threatening those rewards through artificial new regulatory mandates would therefore disproportionately harm lower-income American consumers who use rewards to stretch their budgets.  

Third, it’s important to note that both larger banks and smaller community banks alike warn that expanding government mandates via Durbin-Marshall could raise other costs that consumers already pay.  To illustrate, in the aftermath of the original Durbin debit fee cap discussed above, many banks were forced to offset lost revenue by doing things like raising checking account fees, increasing monthly maintenance charges or reducing the availability of free accounts.  Those are costs that fall upon everyday American consumers, not some elite group.  

In terms of broader overall economic impact, independent analysis from Oxford Economics research anticipates that the Durbin-Marshall credit card mandate would cost the United States economy approximately $228 billion and up to 156,000 jobs, largely by undermining rewards programs tied to the travel and tourism industries.  

That’s not “consumer welfare.”  That’s making everyday life more expensive and less rewarding for consumers.  

This ongoing push to impose the Durbin-Marshall credit card mandates fits squarely within a broader dangerous effort to impose government price controls on the credit card market.  As one recent example, a proposal to impose a one-year, 10% cap on credit card interest rates would constitute a blunt government intervention that would distort credit markets, restrict consumers’ access to credit and threaten the U.S. economy.  That would only serve to force credit card issuers to cut back on credit availability, eliminate rewards programs and raise fees on responsible cardholders.  

Amid a time when affordability remains the top issue for American consumers, they cannot afford the detrimental potential impacts of interest rate caps or the Durbin-Marshall credit card mandates.  The Progressive Policy Institute noted that capping credit card interest rates at an arbitrary 10% would strip issuers of a key risk-management tool, which would in turn sharply restrict credit access for consumers, especially those experiencing sudden financial uncertainty.  

Beyond reducing access to credit, interest rate caps would likely push issuers to offset losses through higher fees, reduced rewards programs and elimination of lower-limit or starter cards on which many working-class and credit-building consumers rely.  Obviously, consumers with lower credit scores would be hit hardest by these proposals, forcing many to miss payments, bounce checks or turn to riskier and more expensive alternatives like loansharks.  

Far from improving affordability, the Durbin-Marshall mandates and proposed interest rate caps risk shrinking consumer choice and increasing out-of-pocket costs at a time when Americans can least afford it.  Together, those proposals reflect the same flawed assumption:  that government mandates can replace market-based pricing without negative consequences.  

The bottom line is that the consumer payment space is already competitive and evolving, and becoming more so by the day.  After all, multiple new forms of digital payments now exist – buy now/pay later services, debit cards, cash and Automated Clearing House (ACH) electronic networks – all vying for users.  

Accordingly, a heavy-handed new government “solution” would only risk interrupting innovation and saddling consumers with unintended consequences – just like President Reagan wryly observed.  

Simply put, claims of “consumer welfare” don’t translate into positive policy outcomes.  In this instance, the Durbin-Marshall credit card mandate would upend the consumer payments system, threaten rewards upon which millions of Americans depend, and as experience shows, fail to lower prices.  

Congress should accordingly reject this counterproductive proposed intervention, and refocus on policies that actually empower consumers and preserve market-driven innovation in financial services.