The head of America's Credit Unions is sounding the alarm that a bipartisan Senate bill aimed at breaking Visa and Mastercard's grip on the credit card market could expose millions of consumers to fraud by routing transactions through less secure payment networks.
Scott Simpson, president and CEO of America's Credit Unions, delivered the warning at a policy event in Washington, D.C., where Treasury Secretary Scott Bessent also appeared. Speaking with Breitbart News economy columnist John Carney, Simpson argued that the Credit Card Competition Act, a bill first introduced in 2022 by Sens. Dick Durbin, an Illinois Democrat, and Roger Marshall, a Kansas Republican, would undermine the security infrastructure that currently protects cardholders from fraud.
The bill, known as the CCCA, would force banks holding more than $100 billion in assets to let merchants choose from at least two payment networks when processing a credit card transaction, and at least one of those networks could not be Visa or Mastercard. Proponents say the measure would break up what they call a duopoly and lower costs for merchants, who could then pass savings on to customers. Simpson and other critics in the financial industry say that promise is hollow, and that the tradeoff in weaker fraud protection is real.
Carney framed the concern directly during the exchange, as Breitbart News reported:
"A lot of people are worried about fraud and cybersecurity, and this could impact the ability of issuers to be able to, especially I think credit unions, but all issuers to be able to deal with fraud and cybersecurity."
Simpson agreed and went further. He explained that the current interchange system, the fee structure that underpins credit card transactions, exists to fund consumer protections. Those protections, he said, come at the card issuer's expense, not the retailer's. That distinction matters because the CCCA would let merchants route transactions away from the networks that built and maintain those safeguards.
Simpson put it bluntly:
"We look at the biggest data breaches in the history of our country and they tend to come from retailers because they don't have incentives. They're not incentivized by the system to protect that data, and so it gives us zero confidence as issuers."
That argument strikes at the core assumption behind the bill. Durbin and Marshall have framed the CCCA as a way to increase competition and end what a press release from Durbin's office called the "Visa-Mastercard duopoly." Those two companies control more than 80 percent of the credit card market. But Simpson's point is that competition in payment routing is not the same as competition that benefits consumers, especially when the alternative networks merchants might choose have weaker fraud-detection and cybersecurity standards.
The CCCA has attracted an unusual coalition. When Durbin and Marshall first proposed it in 2022, original cosponsors included then-Sen. JD Vance of Ohio, Sen. Josh Hawley of Missouri, Sen. Peter Welch of Vermont, and Sen. Jack Reed of Rhode Island, a mix of populist Republicans and progressive Democrats united by skepticism of big financial incumbents. Durbin and Marshall reintroduced the bill in January.
But opposition has also crossed party lines. Critics of the CCCA argue that merchants, not consumers, would pocket the savings from lower interchange fees. They also warn that credit card companies could respond by cutting rewards programs, the cash-back offers, travel points, and other perks that millions of cardholders rely on. The bill's supporters have not offered a binding mechanism to ensure retailers pass savings through to customers at the register.
Simpson's objection adds a different dimension. He is not arguing about who keeps the savings. He is arguing that the bill would actively make the payment system less safe. Credit unions, which serve roughly 140 million Americans, operate on thinner margins than the major banks. If interchange revenue drops because merchants route transactions to cheaper networks, credit unions lose the funding that pays for fraud prevention, and their members bear the risk.
The interchange system is not glamorous, but it is the plumbing that keeps credit card fraud manageable. Every time a consumer swipes or taps a card, the merchant's bank pays a small fee to the card-issuing bank. That fee funds real-time fraud monitoring, dispute resolution, zero-liability protections, and the technology that flags suspicious transactions before they clear.
Simpson described this arrangement as a contract with consumers, one that issuers pay for.
"Yeah, that's what the interchange system is built for, is to establish contracts with the American consumers and reliable protection. Well, that protection comes at the expense of the issuer."
Under the CCCA, merchants could bypass Visa and Mastercard and send transactions through alternative networks that may not invest in the same level of security. The bill requires that at least one of the two available networks be something other than Visa or Mastercard, but it does not impose equivalent security standards on those alternatives. Simpson's concern is that cost, not safety, would drive merchants' routing decisions.
Retailers have a track record that supports that concern. Simpson pointed to major data breaches originating from retail companies, breaches that occurred precisely because retailers lacked the same financial incentive to invest in data protection that card issuers have. When a breach happens at a retailer, it is often the issuing bank or credit union that covers the cost of reissuing cards, reimbursing fraud losses, and notifying affected customers.
The CCCA has not passed. Durbin and Marshall continue to push for it, but the bill faces resistance from the financial services industry, credit unions, and consumer advocates who question whether cheaper routing translates to better outcomes for cardholders. The bill's legislative status, whether it sits before a specific committee or has a scheduled vote, remains unclear from available reporting.
Simpson's appearance at the Washington policy event, alongside Treasury Secretary Bessent, signals that the credit union industry views this fight as existential, not incremental. America's Credit Unions represents the interests of credit unions nationwide, and Simpson's warning was not couched in the usual trade-association hedging. He named the problem directly: retailers do not protect consumer data because they do not pay the price when it is stolen.
The CCCA's sponsors present a simple story, big networks charge too much, merchants pay the toll, and consumers suffer. But Simpson's counter is equally simple and harder to dismiss: the toll pays for the wall that keeps fraud out, and tearing it down to save merchants a few cents per transaction leaves every cardholder more exposed.
When Washington decides who routes your credit card transaction, the question is not whether the swipe gets cheaper, it is whether anyone is still paying to make sure the swipe is safe.