President Donald Trump has thrown his support behind U.S. Senator Dick Durbin’s initiative to lower credit card swipe fees, which currently range from 2% to 4% for consumers using credit cards. This endorsement comes at a time when many Americans are feeling the pinch of rising costs associated with everyday expenses such as groceries and gasoline. “Americans are struggling with everyday purchases… and credit card swipe fees inflate those already exorbitant prices,” Durbin stated, highlighting the burden these fees represent for households across the country.
For several years, Durbin has been advocating for the passage of the Credit Card Competition Act, recently reintroducing the legislation alongside Kansas Republican Senator Roger Marshall. The two senators emphasize that the average family incurs nearly $1,200 annually in swipe fees. However, the proposal has faced pushback from banking and credit union organizations, which warn that these changes could compromise transaction security and disrupt popular credit card reward programs.
Jonathan Capitanini, president of the Italian Village Restaurant, expressed strong sentiments on the issue, noting that his establishment spent over $200,000 on swipe fees in the previous year alone. “Everyone talks about the restaurant business being a business of nickels, sometimes pennies… Truly, it’s three cents on the dollar for us,” he remarked. Capitanini’s comments underline the significant impact that these fees can have on small businesses, particularly in industries that operate on very slim profit margins.
Trump publicly endorsed Marshall and Durbin’s bill on his Truth Social platform, calling it a vital measure to combat “the out of control Swipe Fee ripoff” and praising Senator Marshall as a “FANTASTIC Senator!!!” The proposed legislation mandates that large banks, defined as those with over $100 billion in assets, must offer at least two unaffiliated card networks for processing transactions, which would include alternatives to the dominant Visa and Mastercard networks that currently account for about 85% of the credit card market.
In Illinois, where the discussion surrounding swipe fees has already gained traction, the state government passed the Illinois Interchange Fee Prohibition Act in 2024. This law prohibits the collection of interchange fees on both sales and tips, although its implementation is currently on hold due to legal challenges from banking institutions. Ashley Sharp, chief legal officer for the Illinois Credit Union League, warned that the law could significantly disrupt the established payments processing system, which is designed to be safe, secure, and efficient for both consumers and retailers.
The Illinois law’s effective date has been postponed to July 2026, but the ongoing court battle could yield a ruling in the near future. Meanwhile, Sam Toia, president of the Illinois Restaurant Association, highlighted the financial strain on independent restaurants in the region. With profit margins averaging only 3% to 5% before taxes, Toia questioned how restaurants could absorb swipe fees that could consume up to 4% of each transaction.
In addition to supporting the reduction of swipe fees, Trump has advocated capping credit card interest rates at 10% for a year. This proposal has drawn quick criticism from Wall Street, with bank executives warning that such measures could potentially harm the economy more than they help. The robust debate around this legislation illustrates the complexities and challenges involved in addressing the financial pressures faced by consumers and businesses alike.
