Response to WSJ Article entitled: “Visa, Mastercard Prepare to Raise Credit-Card Fees”

Regarding Angel Au-Yeung’s “Visa, Mastercard Prepare to Raise Credit-Card Fees” (Aug. 30, 2023): A coalition of conservative advocacy groups led a letter to Congress in opposition to the Credit Card Competition Act (CCCA). The bill gives the Federal Reserve (Fed) the power to pick winners and losers, which is anathema to free-market policy. We know this because after the eponymous Durbin amendment was enacted as a part of the Dodd-Frank Act, only 1% of merchants lowered prices, while 22% raised prices. Merchants used the federal government to lower their own costs at the expense of consumers. The CCCA will not lower prices for consumers because it enacts the same routing mandates as the Durbin amendment. The only difference is now the government is targeting credit cards instead of debit cards. 

Inflation is a result of the Fed’s former easy monetary policy and the Biden administration’s excessive government spending. Why should we give the Fed more regulatory authority (which is all the CCCA does) when it propagated inflation and failed to properly supervise Silicon Valley Bank? The Fed has been a primary contributor to the U.S.’s economic turbulence. The Fed should not be rewarded with more authority to regulate the credit card market.