As a West Virginia legislator and someone who has spent much of my life working with small businesses and local communities, I believe we should always look carefully at legislation that could change the way businesses, consumers and financial institutions operate.
That is why I have concerns about the Credit Card Competition Act.
The Credit Card Competition Act would require the nation’s largest credit-card-issuing banks and credit unions, those with more than $100 billion in assets, to make at least two unaffiliated payment networks available for processing credit card transactions. One of those networks would have to be outside the two largest networks, Visa and Mastercard. A processing network is the system used to authorize and route transactions between merchants and financial institutions.
When consumers use their credit cards, merchants pay processing fees, a portion of which goes to the card-issuing financial institution. These fees help cover the costs and risks associated with providing credit, including fraud prevention, and also help fund popular consumer services such as credit card rewards programs.
Supporters of the Credit Card Competition Act argue that requiring additional routing options would increase competition and lower the fees merchants pay. I understand the desire to reduce costs for businesses, particularly small businesses. However, I am concerned that the proposed changes could create consequences that outweigh the anticipated savings.
The alternative routing requirements established under the Credit Card Competition Act could result in billions of dollars in lost revenue for credit-card-issuing financial institutions. That loss of revenue could, in turn, lead these institutions to tighten lending requirements, increase certain costs or reduce benefits, making credit less accessible or more expensive for some consumers.
That is just plain bad for businesses, and it is bad for consumers. If financial institutions tighten credit qualifications and fewer people can obtain affordable credit, that could mean less money being spent in local shops and restaurants.
Small businesses that dot our towns’ Main Streets and power our local economies could also face additional challenges. While smaller community banks and credit unions are generally exempt from the legislation’s direct routing requirements, banking organizations have raised concerns about the indirect effects on these institutions and the customers they serve. Anything that makes credit more difficult or expensive to obtain can also make it harder for small businesses to grow and expand. That is bad for our towns and cities, and it is bad for the entire state’s economy.
Also, if this measure is implemented, credit-card-issuing financial institutions could be forced to reduce or restructure popular consumer services such as rewards points programs. These are the rewards points that individuals often redeem for travel, including trips to places like West Virginia. State, county and local leaders are working hard to expand our tourism sector, and I am concerned that reducing these incentives could make that work more difficult.
Banks, credit unions and payment networks also invest substantial resources in fraud prevention and transaction security. Critics of the Credit Card Competition Act have raised concerns that changes to routing requirements could complicate security arrangements and reduce incentives for certain investments in fraud prevention. While alternative payment networks are not necessarily less secure, these concerns deserve careful consideration. This proposal comes at a time when cybersecurity needs to be improved, and we should be cautious about making changes that could introduce additional risks to consumers’ sensitive financial information.
I am not the only one concerned about this proposed measure. The American Bankers Association and 52 state bankers associations have raised many of these same concerns. These are organizations that have worked to foster and grow the financial sector for generations, and their arguments should carry a lot of weight.
The Credit Card Competition Act is a piece of legislation that has been introduced in Congress numerous times in the past. Previous versions have failed to become law, yet the proposal continues to return. The latest version was introduced in January 2026.
I believe Congress should also consider who ultimately benefits from this legislation. Large national retailers may realize substantial savings from lower processing fees, but there is no guarantee those savings will be passed along to consumers. We should not risk reducing consumer benefits, increasing financial uncertainty or placing additional burdens on community financial institutions without a clear understanding of who will actually benefit.
I have opposed this legislation for years, and I will continue to oppose it because of the potential damage it could do to our financial sector, our tourism industry, small businesses and consumers.
And I encourage our leadership in Washington, D.C., to oppose it as well.
Senator Jack David Woodrum represents the 10th District in the West Virginia Senate.
