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WASHINGTON -- In a 19-16 vote backed by retailers late yesterday, a House committee passed the Credit Card Fair Fee Act, a bill that would mandate credit card companies to negotiate the interchange fees they charge merchants for electronic transactions, The Associated Press reported.
Retailers have argued the fees are set collectively by the credit card companies and large banks, which are then presented to merchants as a "take it or leave it" offer, the AP reported.
Steve Pfister, senior vice president for government relations at the National Retail Federation (NRF), told the AP the bill is "a sensible solution to an escalating problem that's costing consumers more every day."
And NACS recognized the efforts of its members for getting the bill passed. "The successful grassroots phone calls, letters and meetings that retailers initiated over the past few weeks proved that even the small guy can take on the two-ton elephant in the room as long as they are on the side of fairness," NACS senior vice president of government relations, Lyle Beckwith, said in a statement. "This first step in the legislative process is a huge win for NACS members."
Meanwhile, NACS chairman, Richard Oneslager added: "The days when Visa and MasterCard are able to impose exorbitant fees on consumers are numbered. Now that Congress and the public are learning how credit card fees are driving up the price of gas, food and other necessities, the big credit card companies are in for a very rough ride."
However, Josh Floum, Visa's general counsel, said in a prepared statement cited by the AP that the bill "would mandate unnecessary regulatory intervention into a fiercely competitive industry that is benefiting consumers, merchants and financial institutions."
The fees average about 1.6 percent and differed depending on the merchant and type of card, the report stated, citing Visa. Credit card companies have argued the legislation would push more of the cost onto consumers, the AP reported.
The fees, set by Visa and MasterCard, are collected by the merchant's bank as part of a larger charge for processing the transaction, and credit card companies stated they don't receive revenue from the fees, according to the report.
Additionally, Edward L. Yingling, chief executive of the American Bankers Association, told the AP the bill "is simply an effort by the merchant community to have government step in to reduce their cost of doing business."