Centennial State News

Patrick Brenner, founder of the Southwest Public Policy Institute, expressed concerns over state-level legislation aimed at capping interchange fees. He argued that such measures could dismantle credit card rewards programs and increase banking costs for families. Brenner's statement was made in an op-ed on April 4.

"What if those rewards suddenly disappeared overnight," said Brenner. "These state laws amount to a shadow regulatory regime that imposes sweeping price controls on a nationwide financial system. Rewards vanish. Fees rise. Access to credit shrinks. A trip to the grocery store, filling your tank, buying school supplies… every swipe will cost more, and deliver less."

In June 2024, Illinois enacted the Interchange Fee Prohibition Act (IFPA), becoming the first state to prohibit the collection of interchange fees on the tax and tip portions of credit and debit card transactions. According to the Journal Courier, this law was intended to reduce costs for small businesses and consumers but has faced legal challenges from financial institutions. In December 2024, a federal judge issued a preliminary injunction for federally chartered banks, and in February 2025, declined to extend that protection to state-chartered banks and credit unions.

NerdWallet’s 2023 Credit Card Data Report revealed that general-purpose credit card users in the U.S. earned $41.1 billion in rewards throughout the year. These rewards are partially funded by interchange fees paid by merchants, which are included in transaction prices. The report noted that while rewards can benefit individual cardholders, they also contribute to rising costs for consumers and businesses who do not equally benefit from these programs.

Data from the Common Sense Institute indicated that the 2011 Durbin Amendment, which capped debit card interchange fees for large banks, resulted in about half of impacted card issuers eliminating debit rewards. The report also found that many banks compensated for lost revenue by increasing account fees and removing free checking options. Consequently, more lower-income individuals were left without banking services, leading to an increase in the unbanked population across the U.S.

According to its official website, Patrick M. Brenner is the founder and current president of the Southwest Public Policy Institute (SPPI). Brenner previously worked with the Rio Grande Foundation focusing on public policy research related to taxation and government transparency. His commentary has been published in National Review, Fox News, and The Hill with a focus on consumer finance, regulatory reform, and individual liberties.

The Southwest Public Policy Institute was established to promote free enterprise, limited government, and personal responsibility across the American Southwest. Based in Rio Rancho, New Mexico, SPPI operates additional offices in Phoenix, Arizona; Austin; Texas; according to SPPI its research focuses on fiscal policy education regulation market-driven reforms supporting economic growth individual rights.