Local opinion: Credit card bill could hurt Arizona's Latino entrepreneurs

Every election cycle, politicians promise to make life more affordable, support small businesses, and expand economic opportunity for all. This election cycle has been no different. While those are goals every American can support, good intentions aren’t the same as good policy. The Durbin-Marshall credit card bill is a perfect example. Its supporters promise the bill would lower costs for small businesses by requiring that credit cards be issued on at least one “alternative” network to the ones people already know and trust.

That may sound like a good way to increase competition and lower transaction costs, but for many Latino entrepreneurs in Arizona, it threatens to restrict access to credit and shrink the rewards that help support their bottom line.

As President of CreaLatinx, I work with Latino entrepreneurs who are building businesses, creating jobs, and investing in their communities. Time and again, I hear that many face the same challenge: finding the capital needed to start, sustain, or grow a business. Research shows that Latino entrepreneurs are less likely to receive financing through traditional lending channels, making access to affordable credit one of the biggest obstacles standing between a good idea and a thriving business.

The Durbin-Marshall bill would limit community banks and credit unions' ability to support small business lending programs in communities of color. When those institutions lose resources, the consequences hit our communities the hardest. Community lenders may have fewer resources to offer affordable credit programs, and can be wary of taking a chance on entrepreneurs who can’t secure financing from traditional lenders. For business owners who already face barriers to accessing capital, any move that would limit lending options means fewer opportunities to start or grow a business.

As if that weren’t bad enough, the Durbin-Marshall credit card bill would also shrink the revenue that funds credit card rewards programs, which are crucial to helping small business owners reinvest in their ventures, support their employees, and lower their overhead costs. A University of Miami study found that small businesses would lose $1 billion in rewards if this bill goes into effect. For many of us, rewards points are real working capital for our businesses — a necessity, not a perk.

On the other hand, that same study found that Target, Kroger, Home Depot, Walmart, and Amazon would get a billion-dollar windfall from the proposed legislation. The Hispanic Chamber of Commerce understood this risk when Durbin-Marshall was introduced back in 2022, and wrote a letter to Congress warning about the damage it would do to minority-owned businesses while benefiting mega retailers.

If lawmakers are serious about helping small businesses and strengthening our economy, they should look at who this bill actually helps and who it leaves behind. Even though the Durbin-Marshall credit card bill promises relief, the facts show that it would put success even further out of reach for the Latino entrepreneurs and small business owners building Arizona's economy. That’s why I ask that Senator Kelly and Senator Gallego oppose this bill.