Florida Banking December 2023

disappearing are true — an account would not earn or obtain points if the charge doesn’t occur on the point provider’s network — but the loss of fraud protection would be devastating to small retailers and consumers. As everyone reading this knows far too well, when a large retailer experiences a data breach, banks must reissue thousands of credit cards and reimburse hundreds of thousands, if not millions, of dollars in fraudulent charges to consumers. Thanks to interchange fees, financial institutions, not the merchant exposed to the attack, cover those costs. I can only imagine the reaction of consumers if they were to learn their coverage no longer existed, and they would have to simply accept their money has been stolen or sue the merchant and fight it out in court. It’s the reality consumers would be facing under this proposed bill. Small retailers would face a similar dilemma. While the Walmarts of the world could afford to take on some liability — make no mistake; they have no intention of doing so — the quick shop on the corner cannot. Instead of a minimal charge to use credit card services, they would be forced to buy additional insurance to protect against data breaches and fraud or face bankruptcy when things go wrong. Particularly in small communities, the added expense could spell disaster for the local economy. Some have suggested card issuers and banks should simply continue covering losses out of the goodness of their hearts. Serious people understand this is fantasy.

Not only would it be a breach of a bank’s fiduciary duty to its customers and shareholders, but banking regulators would also quickly step in (rightfully so) for safety and soundness reasons. Again, services cost money and cannot exist without the ability to pay for them. I am not naïve to the reality of political posturing when it comes to banking policies. Again, financial institutions have long been an advantageous target for progressives. There are public supporters of the Credit Card Competition Act and other disingenuous bills aimed at the financial services sector who know the economic damage their bills would cause — particularly to low-income families. They’re content to let those of us who take these issues seriously protect them from themselves while they falsely claim to be the champion of the people whose policies would hurt the most. But not everyone falls into that category. Plenty of legislators believe this is the right thing to do. Part of my job as a senior member of the Financial Services Committee is to help my colleagues on and off the committee understand issues with which they’re not familiar. Just as I lean on my colleagues with expertise in other fields to help shape our conference’s policy agenda. Ultimately, we all answer to our constituents. I know where the people of Missouri’s Third District stand on financial fraud protection. Please make sure all your representatives know where you and your customers stand, too.

Congratulations on your retirement, Alex!

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Thank you for 30 years of unwavering dedication and leadership for our industry.



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