Retailers ask Senate to address credit card swipe fees
-- Home Accents Today, 4/26/2010 11:23:00 AM
Retailers are asking the Senate to address credit card swipe fees in financial services reform legislation expected to be on the floor this week.
The National Retail Federation and the NRF’s Council of Chain Restaurants were among 55 associations that signed a letter to senators calling for “simple, common-sense reforms.”
The groups asked that the FTC or another federal agency be given power to “examine and reform the restrictive rules and regulations associated with electronic transactions,” including giving merchants the right to set minimum and maximum credit card purchase amounts and to steer customers toward cheaper forms of payment such as cash, check or PIN debit rather than credit cards.
The letter also asked that the Federal Reserve be given the authority to require that debit card transactions pass “at par,” meaning that merchants would receive the full value of the transaction the same as with cash or checks rather than paying the interchange fees that card industry banks currently collect.
“By providing these and other important reforms, the Congress will send a strong message that it supports modernizing and updating our financial payments systems while providing relief to business owners who have seen their interchange credit and debit card assessments skyrocket,” the letter said.
The proposal is based in part on the Credit Card Interchange Act, sponsored by Rep. Peter Welch, D-Vt. The Welch bill would require increased transparency, give the FTC authority to regulate anticompetitive interchange practices and prevent credit card companies or their banks from restricting merchants’ ability to give cash discounts.
The letter said that annual interchange collections have risen to an estimated $48 billion at a time when businesses “are struggling to help the economy grow again and when consumers can least afford pricing increases.”
UPDATE: Senate Republicans voted Monday to block the start of floor debate: Carrie Budoff Brown and Meredith Shiner for Politico (4/26/10): http://www.politico.com/news/stories/0410/36375.html
UPDATE: President Obama issues statement on stalled financial reform talks (4/27/10): http://www.whitehouse.gov/the-press-office/statement-president-financial-reform-0
UPDATE: Republicans relent; financial reform debate to continue: David M. Herszenhorn and Edward Wyatt, The New York Times (4/28/10): http://www.nytimes.com/2010/04/29/business/29regulate.html?th&emc=th
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