Retailers can tell Congress how they feel about Swipe Fee Reform using online template
FEB. 18, 2011 -- The National Association of Convenience Stores reported on yesterday's "heated" swipe fee reform hearing at which members of the retail and banking communities squared off against each other regarding a rule in the financial services reform bill, proposed in Dec., 2010, that would make debit swipe fees reasonable and proportional to the processing costs incurred. A link to an online template retailers can use to contact members of Congress and the Federal Reserve is at the bottom of this blog post. Clips from the NACS' report, which can be read in its entirety HERE, follow:
The eighth congressional hearing on swipe fee reform was very much like the previous seven: Retailer groups explained how fixing the broken swipe fee system benefits consumers, while the banking lobby sought to distract and scare members of Congress. ...
Inevitably the theme of the day was "delay, delay, delay." Members of Congress who expressed intense desire to delay the implementation of swipe fee reform included: Representatives Kenny Marchant (R-TX), Jeb Hensarling (R-TX), David Scott (D-GA), Jim Renacci (R-OH), Fancisco Canseco (R-TX), Ed Perlmutter (D-CO) and Donald Manzullo (R-IL). Several others followed a line of questioning indicating they would also like to delay reform....
It appeared that many members of the committee were falling over themselves to put on a show for the credit card companies and banks. Each taking turns reciting the banks talking points and asking the questions pre-scripted by the financial industry lobbyists. Committee members expressed a great deal of concern over what the banks called "government price fixing of debit interchange," but surprisingly very little concern over the fact that Visa and MasterCard have been "fixing" these fees for years. Others showed great concern over the profits and income stream of banks but surprisingly little concern over the profits and income streams of retailers. ...
Representative Peter Welch (D-VT), who has been a staunch advocate for merchants throughout the entire swipe fee debate, participated in the hearing despite not being a member of the committee. In his comments he focused on the fact that it was necessary for Congress to step in and fix a broken marketplace and that the regulations the Fed has proposed were indeed going to get the job done....
In the end the committee showed great concern for consumers and the possibility that banks might start charging more fees if swipe fee reform is enacted, but failed to grasp the fact that consumers are already paying these fees through higher prices.
The NACS encourages retailers to contact their members of Congress in support of the Durbin Amendment and to send letters to the Federal Reserve in support of the proposed Swipe Fee Regulations. Templates for composing and sending emails to Congress and the Federal Reserve are at www.unfaircreditcardfees.com
Soubhik commented:
(and nobody shulod think) that every Greek citizen is born corrupt. Yet, unfortunately, international markets have understood (at least intuitively) all of the above, and also that nobody can survive in Greece without bending state rules. This is what we shulod all be here for, to change this pitiful social life through drastic and radical reforms. But the lack of credibility described above, poses a serious constraint to any thought of going back to the drachma.Defaulting on bonds will simply lead most Greek commercial banks to bankruptcy (nobody in the EU would be eager to save Greek commercial banks, unlike what has been agreed on the 26th of October, 2011). If the Greek state handles the chaos resulting from an internal banking crisis successfully, then within a few days most Greek commercial banks will be nationalized. Experienced Greek rent-seeking groups will start complaining and violently ask for rents. The Greek government will issue bonds that can only be put forcefully inside nationalized Greek commercial banks. The central bank will have to swallow all newly issued bonds in order to guarantee the balance sheet of commercial banks, printing drachmas.The above mechanism is so well understood by incidents and observed practices in countries such as Argentina, Brazil, Turkey, etc., that experienced investing banks will bet on an enormous depreciation of the drachma, playing a key role to causing a self-fulfilling prophecy. Hyperinflation will simply cause more volatile economic and social conditions in Greece and chaos will be an almost sure outcome. In light of the above, I think a safe prediction is that if Greece somehow goes back to the drachma, it will end up cutting 6 zeros from prices every 2-3 years for about 10 years until a socioeconomic miracle happens. I really do not want to comment extensively on how harmful and disappointing I find that Greek economists publicly recommend a return to the drachma. In my humble opinion, it gives a terrible signal about what economists think and say, and about our understanding of Greece’s problems. Instead, we must acknowledge the serious corruption problem in Greece, which is part of an economist’s job. Instead of focusing on plain-vanilla current-account calculations with devalued drachmas, we must consider that with Brussels putting the Greek state under the microscope, there is long-term hope. There is no shock therapy for the corruption problem and an extensive politico-economic Greek crisis will not lead to any therapy of corruption. Externally forced fiscal transparency will lead to “killing the beast” described in points 1 and 2 above (not to be misunderstood: I do not mean to eradicate any unions or democratic parties, but the minority of the hardcore rent seekers). Once society internalizes that old rent-seeking practices are not possible for the next 30 years, I think that Greek citizens will start welcoming reforms instead of being suspicious about each and every new reform idea discussed nowadays.
Jacqueline commented:
Always the best content from these prdoiigous writers.
