Opinion: Proposed Credit Card Changes Will Harm the Latino Community


By César N. Chávez

October 7, 2021

Right now, massive corporations like Walmart and Amazon are pushing for changes that would take billions away from consumers and small businesses. 

The past year and a half have been tough for Arizonans. Losing jobs, watching small businesses close, and dealing with the COVID-19 public health crisis hit us hard—especially in the Latino community. 

The University of Arizona reported that nearly 60 percent of Hispanic households reported job disruptions in the first few months of the pandemic, compared to just 22 percent of non-Hispanic white households.

We’re not out of the woods yet, but there are reasons to remain hopeful. Almost half of Arizonans are fully vaccinated, and the Biden Administration’s new PPP loan initiatives specifically targeted small, minority-owned businesses to help our communities. Leaders in Washington should continue uplifting marginalized groups in this pandemic recovery.

Instead, I’m disappointed to say that some in Washington are considering policies that would put our recovery progress in jeopardy. Right now, massive corporations like Walmart and Amazon are looking to quietly revamp a ten-year-old amendment to the Dodd-Frank Wall Street Reform Bill, a move that will take billions away from everyday consumers and our small businesses. 

One decade ago, Senator Durbin (D-IL) introduced this amendment, which added debit card routing mandates and caps to interchange fees, or “swipe fees.” The idea behind these regulations was that by lowering interchange fees for retailers, retailers would save money and lower prices for consumers. 

Unsurprisingly, big retailers decided to pocket the extra $90 billion in profits while either raising prices or keeping prices the same

Both the Minority Business Roundtable and the Latino Coalition advocated against the regulations when they were first introduced, because they knew the harm they would bring. When banks saw their interchange fee revenue cut, they decided to stop offering free checking accounts, raise fees, and raise account minimums for consumers as ways to recoup their losses. A 2014 study from George Mason University reported that the Durbin amendment led to an increase in the unbanked population by one million Americans. Of course, already financially marginalized groups like the Latino community were disproportionately impacted. 

Worse yet were the impacts on our small businesses. Banks had to charge the full interchange fee cap of 22 cents for every single transaction instead of a proportion of the purchase cost, suddenly making small purchases a huge expense for small retailers. Big businesses who sell large quantities made out well, but the more than 2 million Latino small businesses across the country suddenly saw drastic fee increases.

As if all this weren’t bad enough, these same big box stores that benefitted ten years ago are coming back for more. Now they’re trying to extend the Durbin Amendment regulations to credit cards, which would make credit less accessible and kick an estimated five to seven million Latinos out of the credit system. 

Banks would once again make up their lost fee revenue at the expense of consumers—this time by charging higher fees, slashing rewards programs, and raising credit standards. Consumers would lose an estimated $40 to $50 billion per year, and big box stores will once again gladly accept the extra cash without lowering their prices.

Leaders in Congress should be focused on helping the Latino community recover from the economic devastation and public health crisis caused by the COVID-19 pandemic. We need policies to empower our communities, not another corporate payout.


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