Hawkeye Reporter

Scott Zahnle, CEO of Greater Iowa Credit Union, expressed concerns regarding the Marshall-Durbin interchange bill, stating it would negatively impact consumers, small businesses, and local financial institutions. Zahnle's comments were made in an opinion article published by the Des Moines Register.

"The Marshall-Durbin interchange bill would be a disaster for almost everyone it affects," said Zahnle. "It would especially hurt consumers, community-based financial institutions, and small businesses."

According to Congress.gov, the Marshall-Durbin interchange bill, officially titled the Credit Card Competition Act of 2022 (S.4674), aims to enhance market competition by mandating credit card issuers to support at least two unaffiliated networks for processing transactions. The report highlights that the bill seeks to lower merchant costs by disrupting the Visa-Mastercard duopoly. It was introduced in July 2022 and referred to the Senate Committee on Banking, Housing, and Urban Affairs.

The Electronic Payments Coalition raised concerns that the Credit Card Competition Act could lead to increased fraud and weakened data security for consumers. The coalition reported that requiring multiple network options might push transactions onto less secure platforms lacking substantial investment in fraud prevention. It further said that smaller financial institutions could face significant challenges due to heightened risks and compliance costs.

According to a report by the Federal Reserve, small issuers like credit unions in states such as Iowa might experience increased costs and reduced interchange revenue if routing mandates are enforced. Public comments included in the report warned that credit unions serving rural and underserved areas may need to reduce services as a consequence. The Federal Reserve noted that smaller institutions often depend on interchange fees to maintain operations and offer affordable products to their members.

Zahnle is also a member of the Board of Directors for Affiliates Management Company, which is associated with the Iowa Credit Union League. He manages a credit union providing comprehensive consumer and business financial services in Iowa and has extensive experience in the credit union sector.