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The Biden Administration Takes a Swipe at Credit Card Industry

Posted on Tuesday, March 26, 2024
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by Outside Contributor
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The Biden administration regulators see a monopoly boogeyman behind the curtain of nearly every business merger and acquisition — from airlines to cellphones to chicken producers.

Now they’re trying to stop Capital One from acquiring the credit card company Discover.

That’s a bizarre cease-and-desist order, because this acquisition by Capital One would INCREASE rather than inhibit competition in an industry that processes two-thirds of retail store and online transactions worth $5 trillion each year. Americans love swiping and tapping for their shopping.

To suggest that the acquisition of two companies that control less than 10% of the market is anti-competitive is a proposition that borders on the absurd.

For years the Federal Trade Commission and retailers have argued falsely that there isn’t competition in the credit card market. There are dozens of credit cards issued by banks and retailers — and Americans have freedom to choose the best deal.

Visa, Mastercard and American Express have grabbed more than 90% of the market — not because of a lack of competition but mainly because consumers like the convenience that almost all stores accept these cards, and millions of shoppers like the reward points for free flights, vacation deals and cash-back options.

If Discover and Capital One combine forces, we could see the emergence of a fourth major player on the scene. Someone needs to tell the Biden regulators: If three major rivals compete, that’s good. If four do, that’s even better for consumers.

The merger is likely to mean fiercer competition — which means LOWER fees and interest charges. Ironically, in other lawsuits against the credit card industry, the FTC alleges credit card companies like Visa and Mastercard are colluding to keep fees high. In this one, the regulators are blocking a merger that will help nudge the interchange fees and interest payments down.

This isn’t just conjecture. Discover already charges LOWER credit card processing fees than Visa, Mastercard and American Express. With financial support from Capital One, it can make the investments needed to expand its market share, which would mean merchants would have opportunities to negotiate down interchange fees with card providers. Similarly, the rivalry will impel card issuers to offer consumers new and better benefits. Why would anyone oppose that?

Alas, it’s not just the Biden hyper-regulators who are trying to block this marriage. Sens. Josh Hawley (R-Mo.), a conservative, and Elizabeth Warren (D-Mass.), a liberal who hates big business, are loud skeptics as well.

They should listen to Jamie Dimon, CEO of JPMorgan Chase, a direct rival of Capital One, who says, “Companies should be allowed to do and innovate and grow and merge … If that’s how they think they can best compete with JPMorgan, you should let them.”

Amen. Government never reduces prices. The free enterprise system does.

Stephen Moore is a visiting fellow at the Heritage Foundation and a senior economic advisor to Donald Trump. His latest book is: “Govzilla: How the Relentless Growth of Government Is Devouring Our Economy.”

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Morris
Morris
3 months ago

This should not surprise anyone. The Biden administration is the king of misinformation. any group that thinks they can control climate change is foolish. There is not one word in the Bible that gives man dominion over the universe or climate. Man was given dominion over the animals, fowl, fishes, and all creeping walking, crawling, swimming, flying creatures as well as the the plants ,herbs, and trees. We have messed up the trees which help to purify our atmosphere by not replacing the billions of them that have been removed over the centuries.This has also exposed the ground to the excessive amount of heat that rises into our atmosphere and causes global warming. Of course this doesn’t surprise me because they attack the MAGA Conservatives and Christians like we are the threat to democracy. It also is negative to the never ending money laundering scheme that they have created out of the climate change hoax.The way to fix the global warming issue is to plant 2 trees for every one we cut down. Maybe some time in the future we will be able to catch back up to climate normalcy without a calling for EV’s and windmills, and the ban of fossil fuels.Stupid policy created for the theft of our finances and our republic. Wake up America!!!!

David Millikan
David Millikan
3 months ago

Excellent article. When are people going to learn that Dictator Beijing biden equals COMMUNISM and SLAVERY. While President Trump equals CAPITALISM and FREEDOM.
It doesn’t take a genius to figure this out.
I pick President Trump.

Max
Max
3 months ago

Well, I wonder? How much stock does the Biden family have in Discover that this merger would ruin his relationship with his bed fellows (China)? It looks like the powers controlling the administration fear that this merger would ruin their future plans of domination.

Kim
Kim
3 months ago

Instead of harassing credit card companies, why won’t the biden administration talk to the Federal Reserve about lowering interest rates? The point of commerce is to encourage people to spend money and for businesses to make a profit. High interest rates hurt consumers, businesses, and the GDP. And high rates kill the taxpayers when interest is paid on the national debt. I realize the Federal Reserve is independent, but they should look for better chairmen than Yellen and Powell.

They should listen to this guy…oh, what’s his name?..oh, yeah, Stephen Moore…

One more thing this administration can’t comprehend is that competition is good for the marketplace, the consumer, and the country’s prosperity. All government does is get in the way of commerce with its endless regulations, high taxes, high interest rates, and their general disdain for private business. I can’t wait for these 4 years to be over!

John
John
3 months ago

This is just a red flag operation to get people to hate credit cards so our Totalitarian Communist Democrat Party Comrade’s can move forward with digital money controlled by them.

Trampled_by_Skunks
Trampled_by_Skunks
3 months ago

Joe Biden, destroying America today and every day since he’s been in office.

Tim Toroian
Tim Toroian
3 months ago

Thank God to our founders for their lovely construction of the second paragraph of the Declaration of Independence as well as the Bill of Rights and the literal meaning of the Second Amendment. If you haven’t read that second paragraph recently, you should do so. The long train of abuses and usurpations doesn’t necessarily refer to time. It can be interpreted as referring to the length of the list. And ours is getting long.

Doug C
Doug C
3 months ago

Biden’s Socio-Communist GOONs attempting to advance their agenda of throttling Capitalism and inserting a Communist government control. There is only one good Communist … A DEAD one!!

Joe
Joe
3 months ago

Something that this article doesn’t address is that conservative news outlets exposed Visa and Mastercard for reporting gun/ammo purchases to the 3-letter unigovernment organizations while Discover Card did not. I’m not sure if this has changed, but if not, the merger of Capital One and Discover will result in having your Second Amendment purchase reported to big brother, even if you use your Discover card.

Lover of God and America!
Lover of God and America!
3 months ago

Combining the two should be a great idea! We could use less interest charged!

Bob Chase
Bob Chase
3 months ago

Just jockeying for his 10%. How about we eliminate all credit cards AND FEES?! Go Bitcoin!

Robert Zuccaro
Robert Zuccaro
3 months ago

Now what else can they screw up? Gas is $4.69/gallon at my local station. Fast food and pizza restaurants are laying off workers in California before the $20/hour minimum wage jump. Except Panera… because their CEO is a butt bud of Gavins. Is it time to dump tea in a harbor?

Howard
Howard
3 months ago

If you have one credit card company controlling the market, that’s a monopoly. But if you have several, including 3 or 4 major players, then that’s good competition and the basis for a healthy free market system. Common sense, but common sense doesn’t rule in D.C.

Kdesq
Kdesq
3 months ago

I really like Josh Hawley, but somebody’s giving him bad advice or the cc lobbiests are paying his pac well.

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