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WASHIGNTON, D.C. — As the new Congress takes its collective seats, the retail community is ready to work together to get down to business — namely on debit reform.
NACS, the Association for Convenience & Fuel Retailing, and 170 state and national merchant groups are reaching out to members of the U.S. Senate and the House of Representatives to stress the importance of keeping debit reform in place.
Debit reform — a hard-fought battle over swipe fees between retailers and banks and financial service companies — was part of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.
"The debit reforms contained in Dodd-Frank are unique in that they brought the first piece of competition and transparency into a market that was historically void of it. The reforms in the law have benefited American consumers, merchants, small financial institutions and the economy as a whole," the retailer coalition wrote in a letter to all Congress members on Jan. 4.
"Repealing or weakening the law will provide a windfall for fewer than 2 percent of the country's largest banks and remove any and all competition from the debit routing market. As representatives of retailers and employers from every state and congressional district in the country, we ask you to join us in opposing any effort to weaken or repeal these important debit reforms," the coalition added.
According to the letter, the reforms have brought a level of transparency and competition into "a market where fees were traditionally set collectively behind closed doors and without regard to the costs imposed on American consumers and Main Street retailers."
The amendment passed with more than 60 votes and support from both sides of the political aisle after an open debate on the Senate floor nearly seven years ago.
"This was an essential first step to move America's electronic payments system toward a truly open and free market," the retail groups added.
The letter comes as President-elect Donald Trump prepares to take the oath of office on Jan. 20. Reforming Dodd-Frank has been cited by Trump as legislation his administration will address. It also comes as 60 new members join the 115th Congress.
"The law requires that each debit card have a minimum of two unaffiliated networks enabled on the card. By requiring two networks, the large card brands, such as Visa, actually now have to compete with other debit networks for retailers' routing business," the coalition's letter explains. "The result of the law has meant that networks compete on price, security and reliability in order to attract retailer business. … Repealing this provision would remove all competition from the debit market and make our national payment system less reliable and secure."
The retail industry has already faced challenges to debit reform. In June, U.S. Rep. Randy Neugebauer (R-Texas) introduced a bill, H.R. 5465, to repeal the section of the Consumer Financial Protection Act of 2010 relating to rules for payment card transactions, including what he called "the misguided debit swipe fee reforms introduced by the Dodd-Frank Act," as CSNews Online previously reported.
Within weeks, Rep. Jeb Hensarling (R-Texas) released a discussion draft of the Financial CHOICE Act, the Republican plan to replace the Dodd-Frank Act and promote economic growth. CHOICE stands for Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs.
In September, a group of 407 big and small retailers urged lawmakers not to repeal reforms aimed at curtailing global credit and debit card companies' anti-competitive practices. The coalition includes convenience store retailers 7-Eleven Inc., Aloha Petroleum Ltd., CEFCO Convenience Stores, E-Z Mart Stores Inc. and RaceTrac Petroleum Inc.