NRF Urges Dodd to Include Interchange in Reform Bill
WASHINGTON, D.C. -- The National Retail Federation (NRF) expressed disappointment that a wide-ranging financial services reform bill unveiled this week by Senate Banking Committee Chairman Christopher Dodd, D-Conn., doesn't address the $48 billion in credit card swipe fees paid by merchants and their customers each year.
"Chairman Dodd's bill takes many steps to curb the excesses of the financial services industry, but the failure to address swipe fees is a glaring omission," NRF Senior Vice President and General Counsel Mallory Duncan said. "These fees drive up prices for the average family by hundreds of dollars every year and depress the ability of main street merchants to thrive and grow.
"Financial services reform isn't complete without swipe fee reform," he added. "Chairman Dodd has acknowledged the impact of these fees on consumers in the past, and we hope to see them addressed in the final version of this legislation."
Visa and MasterCard banks charge merchants a fee called interchange each time one of their cards is swiped to pay for a purchase. With the fee averaging roughly 2 percent, "swipe fee" collections totaled $48 billion in 2008, triple the $16 billion collected when NRF began tracking the fees in 2001. NRF contends the fees have caused the average household to pay an estimated $427 in higher prices in 2008, up from $159 in 2001.
Dodd included a provision in last year's Credit Card Act requiring the Government Accountability Office to conduct a study of interchange fees. The study concluded that credit card "swipe" fees have been increasing despite card industry claims they have remained steady. The study also concluded the fees drive up prices for consumers and that consumers could see lower prices if they were reduced, according to a statement by NRF.
Dodd has said he would consider legislation barring Visa and MasterCard from placing restrictions on merchants' ability to offer a discount for cheaper forms of payment such as cash, checks and debit cards.
Three major bills that would address swipe fees are pending in Congress. H.R. 2695, the Credit Card Fair Fee Act, sponsored by Judiciary Committee Chairman John Conyers, D-Mich., and Senate companion bill S. 1212, sponsored by Majority Whip Richard Durbin, D-Ill., would require Visa and MasterCard banks to negotiate with merchants over the fees rather than continuing to impose them on a unilateral basis. H.R. 2382, the Credit Card Interchange Act, sponsored by Representative Peter Welch, D-Vt., would require increased transparency, give the Federal Trade Commission authority to prohibit interchange practices that violate consumer protection or anti-competition laws and make cash discounts easier.
The National Retail Federation is the world's largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores, as well as the industry's key trading partners of retail goods and services.
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Interchange Fee Reform Dropped by House Committee
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"Chairman Dodd's bill takes many steps to curb the excesses of the financial services industry, but the failure to address swipe fees is a glaring omission," NRF Senior Vice President and General Counsel Mallory Duncan said. "These fees drive up prices for the average family by hundreds of dollars every year and depress the ability of main street merchants to thrive and grow.
"Financial services reform isn't complete without swipe fee reform," he added. "Chairman Dodd has acknowledged the impact of these fees on consumers in the past, and we hope to see them addressed in the final version of this legislation."
Visa and MasterCard banks charge merchants a fee called interchange each time one of their cards is swiped to pay for a purchase. With the fee averaging roughly 2 percent, "swipe fee" collections totaled $48 billion in 2008, triple the $16 billion collected when NRF began tracking the fees in 2001. NRF contends the fees have caused the average household to pay an estimated $427 in higher prices in 2008, up from $159 in 2001.
Dodd included a provision in last year's Credit Card Act requiring the Government Accountability Office to conduct a study of interchange fees. The study concluded that credit card "swipe" fees have been increasing despite card industry claims they have remained steady. The study also concluded the fees drive up prices for consumers and that consumers could see lower prices if they were reduced, according to a statement by NRF.
Dodd has said he would consider legislation barring Visa and MasterCard from placing restrictions on merchants' ability to offer a discount for cheaper forms of payment such as cash, checks and debit cards.
Three major bills that would address swipe fees are pending in Congress. H.R. 2695, the Credit Card Fair Fee Act, sponsored by Judiciary Committee Chairman John Conyers, D-Mich., and Senate companion bill S. 1212, sponsored by Majority Whip Richard Durbin, D-Ill., would require Visa and MasterCard banks to negotiate with merchants over the fees rather than continuing to impose them on a unilateral basis. H.R. 2382, the Credit Card Interchange Act, sponsored by Representative Peter Welch, D-Vt., would require increased transparency, give the Federal Trade Commission authority to prohibit interchange practices that violate consumer protection or anti-competition laws and make cash discounts easier.
The National Retail Federation is the world's largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores, as well as the industry's key trading partners of retail goods and services.
Related News:
Interchange Fee Reform Dropped by House Committee
Report: Interchange Fees Impede Economic Growth, Job Creation