Why does corporate America keep caving to Democrats? How, after everything Republicans have done for them for decades, are big businesses folding like The Flash on laundry day to every crazy, woke demand? Even Walmart – the last company you’d think to go woke – is brainwashing their employees with Critical Race Theory dogma these days.
This must be good news to Sen. Dick Durbin (D-Ill.) who has been looking for years for ways to break big business away from the GOP. Mr. Durbin hardly needs to try these days, but for one creative idea he’s come up with, you have to give him credit.
So to speak.
Mr. Durbin has been the driving force against the credit card industry, pushing for the government to essentially eliminate credit card rewards. It’s Democrats’ own disgusting Rule 34 for bad governance: If something good exists, it must be taxed or regulated out of existence.
In the legendarily bad 2010 Dodd-Frank Wall Street reform law, Mr. Durbin first scored a major victory – for him, not us – now known as the Durbin amendment, which killed debit card rewards: Banks can’t make money on these transactions so they don’t do them anymore. Now Mr. Durbin wants to cap the amount banks can charge retailers each time a customer uses a credit card, known as swipe fees or interchange, which will have comparably negative effects.
The Democrats insist the government should mandate a new price control because they believe that credit card payments that are secure, fast, and convenient are also too expensive.
It’s a political sleight of hand.
But the premise that credit cards are pricey while other forms of payment are free is false. Paying with cash is very expensive to a retailer because cash has to be deposited and is much easier to steal than invisible 1s and 0s, which are factored into retail insurance rates. When consumers get cash, they have to pay ATM fees and more. One alternative, personal checks, are increasingly not accepted at all because of the risk if they bounce.
By regulating the largest institutions and payment networks, the bill will force changes in the whole credit card ecosystem. That means credit unions will have to pay for things like updates to technology and reissuance of cards. It will cost billions of dollars and it will disproportionately affect community banks and credit unions that do not have the resources of big banks.
This is all a bait-and-switch by retailers, who want to save themselves money by not paying credit card companies for providing the service of allowing, well, modern life to flow as smoothly as it does. If …….