[WASHINGTON, DC] June 4, 2024 — OHI (formerly National ARVC) is urging congressional leadership to support the Credit Card Competition Act, S. 1838/HR 3881. The following communication was sent to The Honorable Charles Schumer, The Honorable Mike Johnson, The Honorable Mitch McConnell, and The Honorable Hakeem Jeffries on Monday, June 3, 2024.
Dear Majority Leader Schumer, Minority Leader McConnell, Speaker Johnson and Minority Leader Jeffries:
OHI, the national voice of the Outdoor Hospitality Industry, strongly urges you to pass the Credit Card Competition Act. Like most Main Street businesses, the swipe fees our members pay to accept credit cards have grown at a remarkable rate. These fees increase inflation and reduce the buying power of American consumers, and the situation has become untenable.
OHI, previously the National Association of RV Parks and Campgrounds, represents more than 11,000 RV parks, campgrounds, and“glamping” businesses nationwide. More than 85% of outdoor hospitality businesses are independently owned small businesses that serve the traveling public with unique experiences which have allowed our industry to grow over the past decade. Theoutdoor hospitality industry was valued at $25.8 billion in 2019, is valued at $34.9 billion today and is expected to reach $41.7 billion by 2027. In all, the outdoor recreation economy accounts for $564 billion in annual consumer spending (2.2% of GDP) and 5.2 million jobs.
When people think of credit cards, they think of stores, not campgrounds. But most Americans enjoying the great outdoors pay by credit card these days, the same as they pay just about everywhere else. Even campgrounds in rural areas aren’t immune from swipe fees and their impact on the economy. Having the card industry take a slice out of every purchase adds to our members’ struggle to make a profit. Moreover, people who go camping aren’t cashing in credit card rewards for their stay and shouldn’t be burdened by the higher prices caused by high swipe fees. Banks and card companies should have to compete the same as our members do every day.
Credit card swipe fees make operating a small business like an RV park or campground more difficult every year because these fees have grown so rapidly and constantly increase operating costs. Last year, swipe fees on Visa and Mastercard credit cards alone topped $100 billion for the first time. Altogether, credit and debit card swipe fees cost merchants and their customers a record $172 billion in 2023, driving up prices by over $1,100 for the average American family.
If swipe fees were going up in a competitive, functioning market that would be one thing. But that is not what is happening. The market is broken, with Visa and Mastercard setting rates that all financial institutions that issue cards under their brands agree to charge. The market desperately needs competition to improve not only fees but the service and the security of Americans’ financial data.
The Credit Card Competition Act would provide that needed competition and security. It is a modest reform that would only apply to the nation’s largest banks and ensure that they provide at least two network options on their credit cards. Not a single community bank and only one giant credit union would be affected. While modest and narrowly targeted, the impact would be important. Finally, providing small businesses like the outdoor hospitality businesses we represent some modicum of market choice and competition would spur a cycle of competitors working to get better at earning our business—a dynamic sorely lacking today.
One key thing we would note is that the criticisms of the Credit Card Competition Act simply are not accurate. In particular, some have claimed that the tourism industry would be hurt by the passage of the bill. OHI members know that is not the case. What hurts the tourism industry is the unconscionable size and increases in the fees businesses must pay simply to receive payment for their offerings. That leads to increased inflation that depresses economic activity—including travel. We can tell you that reducing costs on transactions will put more money in the average American’s pocket and lead to more travel and recreation, and more economic activity for our businesses (most of which are located in rural areas) and many others across the economy. We need the Credit Card Competition Act to continue to grow and ensure that our industry remains healthy to provide Americans with the diverse travel experiences they have come to expect and the ability to get outdoors to enjoy our beautiful country.
We know that the credit card institutions will be fully incentivized to keep offering rewards programs and will have many revenue streams from those cards to justify rewards, marketing, and other expenses. The scare tactics about the diminishment of rewards programs simply do not reflect the reality of the market.
To help grow travel and tourism, particularly the outdoor hospitality industry, we need a competitive market for credit card payments.
We urge you to act swiftly to pass the Credit Card Competition Act. It will provide real, needed relief to ourbusinesses and our customers at a time when it’s needed most.
Sincerely,
Paul Bambei
President and CEO, OHI
