Federal credit card regulations proposed in 2023 could lead to a loss of $6.5 billion in economic activity and 6,800 job losses in Miami, according to an analysis conducted for the Electronic Payments Coalition (EPC) by Oxford Economics Research (OER).
“This study points to yet another alarming consequence of the Durbin-Marshall bill – an economic headwind so strong that the economy will lose a quarter of a trillion dollars of GDP and a disturbing number of jobs,” said Richard Hunt, Chairman of the EPC. “The U.S. economy cannot afford a quarter-trillion dollar hit, and workers in cities across the country should not have to suffer so corporate megastores can pad their profits.”
“Make no mistake, this bill would create a completely avoidable downturn in local communities. It is anti-growth and dangerous economic policy,” said Hunt.
Originally sponsored by U.S. Sens. Richard Durbin (D-Ill.) and Roger Marshall (R-Kans.), the so-called Credit Card Competition Act would require banks to offer merchants at least two network options, one of which cannot be Visa or Mastercard, for processing credit card transactions. Opponents to the bill argue that if given the choice, retailers would likely choose cheaper, less secure networks for processing transactions, thereby exposing consumers to increased securities and fraud risks.
The potential impact of the bill on ”discretionary spending disproportionately affects industries such as entertainment, travel, and recreation, geographic regions reliant on these industries are more susceptible to unintended outcomes,” said the study.
As such, the bill could result in a $6.5 billion loss in economic output in Miami, said the report, in addition to 6,800 lost jobs.
The analysis also said Orlando could lose $3.7 billion in economic activity and 8,700 lost jobs.
Nationally, the bill could result in a $227 billion loss in economic output over approximately four years, driven by a 100 basis point reduction in interchange and an $80 billion decline in discretionary spending, according to the OER study, with regions reliant on travel and recreation spending projected to experience the greatest economic impact from the proposed policy.
OER is a global advisory firm that provides economic forecasting and analysis. The company was founded in 1981 as a commercial venture with Oxford University’s business college. It offers research on economic trends, policy, and industry performance for governments, businesses, and financial institutions. The firm operates offices in various regions, including North America, Europe, and Asia. Oxford Economics produces reports and data covering global and regional economies, industries, and markets.
The EPC is a trade association that represents credit unions, community banks, and payment card networks. The coalition advocates for policies that protect and promote the use of electronic payments.
