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DETROIT -- On the same day the Federal Reserve was originally supposed to finalize new regulations for debit card swipe fees, one Detroit-area retailer took the opportunity to make his case known in an opinion column in the Detroit Free Press.
"Detroit-area retailers and consumers need U.S. Sen. Debbie Stabenow, D-Mich., and U.S. Rep. Thaddeus McCotter, R-Livonia, to go to bat for them to ensure that a cap on debit card fees takes effect as planned this summer," wrote Tommy Paull, operations manager at the Cigar Factory Outlet in Troy, Mich. "Members of Michigan's congressional delegation are facing a well-financed effort by big banks and credit card companies to derail the reforms, which are part of the Wall Street Reform and Consumer Protection Act signed into law last year. That can't happen -- small businesses and beleaguered consumers need a break on sky-high debit card fees."
U.S. Federal Reserve Chairman Ben Bernanke told lawmakers late last month that the Fed wouldn't be able to meet the original April 21 deadline for issuing new rules. The Fed in December proposed capping the debit fees -- also known as interchange fees -- at 12 cents per transaction.
Bernanke, in his letter to lawmakers, noted that more than 11,000 commenters weighed in on the Fed's controversial proposal to rein in the interchange fees, and he said the information provided in those comments is important for assessing the effects of the rule.
"Because of the volume of comments and the complexity of the issues raised in those comments...we have concluded that we will be unable to meet the [Dodd-Frank Act's] directive that the board issue final interchange fee standards by April 21," Bernanke wrote.
The Fed plans to issue its rules by July 21, which is also when they are slated to go into effect.
"We recognize that the act's provisions limiting interchange fees become effective by their terms on July 21 even without board regulations and we are committed to completing the rulemaking for the provisions in advance of that date," Bernanke wrote. "I want to assure you that we are devoting substantial resources to these efforts to ensure that we give the issues the careful consideration they deserve."
In his opinion column today, Paull noted that the average debit card transaction costs only about 4 cents to process, "yet big banks and MasterCard and Visa -- which have cornered 80 percent of the market -- gouge us with fees 10 times that amount, or an average 44 cents per transaction."
"Small business owners have watched helplessly as swipe fees have mushroomed by 300 percent over the last decade. And when a local merchant gets socked with higher fees, the cost is passed along to the consumer through higher prices," Paull continued.
"Michigan's members of Congress must resist cozying up to big banks and instead stand up for consumers and small business owners who are the backbone of our economy. They should ensure that caps on debit card fees go into effect this summer as planned."