It’s hard to believe, but it’s that time of year again. Seemingly out of nowhere, it’s upon us –members of Congress are scrambling to get their priorities into “must-pass” legislation.

One candidate for making it into a must-pass bill is the Credit Card Competition Act of 2023, a bill that would impose a “routing requirement” on the credit card market. The bill would force credit card service providers to offer comparable services that their competitors provide.

Only in Washington would someone sell this idea as one that improves competition.

The policy is the brainchild of Senator Dick Durbin (D‑IL), the man who, with the Durbin Amendment, introduced price controls and routing requirements to the debit card market, thus ushering in the end of rewards programs on debit cards. Logically, the new bill could do the same thing to the credit card market, but somehow this policy is supposed to be good for consumers.

Regardless, the CCCA already has bipartisan support. It was introduced by Senators Durbin, Roger Marshall (R‑KS), Peter Welch (D‑VT), and J.D. Vance (R‑OH). And given many Republicans’ attitude toward China, the bill has a real shot because of a seldom reported provision in a subsection titled “Designation of National Security Risks.”

The provision would give the Federal Reserve the authority “to establish a public list of any payment card network” that the Fed determines poses “a risk to the national security of the United States,” or one that is “owned, operated, or sponsored by a foreign state entity.”

Leaving aside the effect that excluding networks would have on competition, this provision is just the latest example of Congress expanding the power of unelected bureaucrats to affect the way Americans conduct their lives. In this case, the Senators want to give the Fed–an arm of the federal government that has virtually nothing to do with assessing risks to national security–the power to blacklist companies from the payments sector.

Expanding vague discretionary powers of this sort for any federal agency is a horrible idea. Expanding them to the one that directly controls how innovation and competition unfold in the payments sector makes it worse. Selling the idea as one that will improve competition doesn’t even pass the laugh test.

Speaking of comedy, according to Senator Marshall, Americans shouldn’t be worried about this bill killing rewards programs because credit card rewards “are for rich people.” I suppose that line plays well somewhere, but middle-class Americans do like their rewards.

And while Americans surely don’t like the recent rise in their cost of living, it seems that some of the CCCA’s sponsors have forgotten what caused that increase.

According to Senator Vance, “Working families all over Ohio are getting crushed by inflation every time they go to the grocery store or fill up on gas. Meanwhile, two massive companies have a stranglehold on credit card swipe fees and are increasing the costs of these everyday essentials.” So the federal government forces everyone to stay home, wrecking the economy, and then shells out $7.5 trillion to spend on goods and services that are already difficult to buy. Prices shoot through the roof, and Vance targets credit card swipe fees.

That’s bad enough, but it’s just not true that two card companies have a stranglehold on anything. Visa and MasterCard do not have a duopoly. And if they do have more market power now than they did in the past, Americans can thank Senator Durbin because there were 15 card networks prior to the 2010 Durbin amendment.

Regardless, statistics on the credit card market–not the combined credit and debit card market–show that Visa has about a 50 percent market share (by volume), while Mastercard and American Express have roughly 20 percent each. And Discover, the fourth largest card network, has been growing slowly and steadily.

The market can also be viewed by the share of Americans that have a particular card, and that’s even more problematic for the senators. This view shows that 50 percent of Americans have a Visa, slightly fewer than 40 percent have a Mastercard, 18 percent have a Discover, and 15 percent have an American Express. Visa certainly is the larger company, but there is no duopoly in this market in any objective sense.

And even if two card networks did dominate the market, that fact alone would not warrant routing requirements. Still, the Durbin-Vance policy doesn’t do what they want people to think. They pitch the idea as giving people more choices and expanding competition in the payments sector, but that’s not the reality.

What the CCCA will do, however, is explicitly take the ability to choose a network away from both the people who issue cards and the people who pay with cards, instead giving that ability to the merchants. Provided, of course, the network meets the Fed’s approval. Put differently, the CCCA will restrict competition and further minimize consumers’ influence.

Just like the 2010 Durbin Amendment, the CCCA is a terrible public policy. It will impose higher costs on millions of Americans for the sake of the merchant trade associations. If members of Congress want to help consumers, they should encourage competition and innovation by repealing the Durbin Amendment, not extending its provisions to the credit-card market.