MD|DC Credit Union Association Testifies in Opposition to Maryland Interchange Bill

John Bratsakis, President and CEO of the MD|DC Credit Union Association, testified before the Maryland House Economic Matters Committee on Tuesday, voicing opposition to HB29. The bill would exclude taxes and tips from interchange fees. Bratsakis argued that the bill would complicate payment processing, increase fraud risks and costs, and offer no benefit to consumers.

Bratsakis emphasized that the bill lacks a compelling state interest, noting that similar legislation has failed in 30 states. In Illinois, the only state where such a bill passed, a federal lawsuit is challenging its legality. In fact, the Office of the Comptroller of the Currency (OCC) has described the Illinois bill as "ill-conceived," warning that it could "significantly increase fraud risk, constrain consumers, and erode public trust."

Bratsakis explained that interchange fees support fraud detection, cybersecurity, and secure payment systems. Excluding taxes and tips would reduce the revenue needed to sustain these protections, potentially increasing the risk of fraud and data breaches, which could harm consumers and businesses.

The panel also included representatives from the Maryland Bankers Association, Electronic Payments Coalition, Southwest Airlines, and TechNet. America's Credit Unions also opposed the bill, joining in a letter of opposition.