Washington, D.C. — On Friday, Demand Progress Education Fund and a coalition of consumer advocates and antimonopoly activists called on a federal bank regulator to abandon its plan to explicitly endorse price-fixing by the nation’s largest banks.
The Office of the Comptroller of the Currency wants to invalidate state laws that attempt to regulate the swipe fees set by Visa and Mastercard that merchants — and by extension, consumers — pay when a customer uses a credit card. The OCC is taking particular aim at a law in Illinois, which is now the subject of a lawsuit, but has broadened its assault to include any such legislation in other states in the future.
The OCC’s plan is “yet another phase in the long-running efforts by this agency to protect the bottom lines of national banks and to suppress every possible effort by states to exercise their power to regulate finance,” the groups wrote in the letter.
The regulation would preclude state efforts to regulate the manner in which Visa and Mastercard set swipe fees, money that is then shared with card-issuing banks. Illinois has such a law on the books and Colorado Governor Jared Polis is currently considering whether to sign similar legislation in that state.
Alarmingly, the OCC regulation would also extend federal protection for banks that want to collectively fix other charges, provided they do it via third parties like Visa and Mastercard.
“The OCC is opening a Pandora’s Box of potentially anticompetitive behavior across a wide range of bank fees,” the groups wrote.