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WASHINGTON, D.C. — Retailers across the country won a hard-fought battle for swipe-fee reforms when the Durbin Amendment was included in the Dodd-Frank Wall Street Reform and Consumer Protection Act. Now, legislation to take back these reforms is heading to a committee vote in the House of Representatives.
The House Financial Services Committee will begin meeting next week to discuss the Financial CHOICE Act (Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs). Supporters of the measure, headed by Rep. Jeb Hensarling (R-Texas), call it a "pro-growth, pro-consumer" alternative, according to Housing Wire.
Hensarling is chairman of the House Financial Services Committee.
As the news outlet reported, the committee is slated to begin debating the Financial Choice Act on Sept. 13. Included in that discussion will be the addition of possible amendments to the bill and perhaps a vote on the legislation. If the bill passes out of the committee, it would then go to the full House of Representatives for a vote.
However, retail groups are taking a stand against any legislation that would repeal swipe-fee reforms.
"NACS is deeply disappointed that Rep. Hensarling will try to repeal debit swipe fee reform. A repeal would allow the credit card goliaths to resume price-fixing of debit-card fees and block smaller card networks from competing with them for business," said Lyle Beckwith, senior vice president of government relations of NACS, the Association for Convenience & Fuel Retailing.
"Even with reform, the dominance of the Visa-MasterCard duopoly means retailers and consumers in the United States pay the highest swipe fees in the world — up to seven or eight times European levels," he added. "Without the vital protections of debit reform and the small measure of competition it has introduced to the market, consumers would face higher prices and smaller merchants would face even greater burdens — especially convenience store owners."
Beckwith urged Congress "to put the interests of merchants and consumers ahead of the credit card giants by voting against the Financial Choice Act."
The Retail Industry Leaders Association (RILA) is also urging members of the committee to vote no when the CHOICE Act comes up for a vote next week.
As RILA explained, as part of the swipe-fee reform, the fees that banks and card networks charge every time a debit card is swiped are "reasonable and proportionate to the cost of processing the transaction."
"Repealing debit swipe fee reforms would once again allow the largest banks and card networks to impose outrageous fees on merchants across the country, while hurting everyone outside Wall Street," said Jennifer Safavian, RILA's executive vice president for government affairs.
"Make no mistake, the CHOICE Act's central objective is to turn back the clock on reforms that brought fairness and competition to the broken debit card market. We urge members to recognize the importance of competition in the payments ecosystem and to oppose the CHOICE Act,"she added.