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WASHINGTON D.C. -- Lead by the Credit Card Con, a project of Consumers for Competitive Choice (C4CC), small business owners came together here yesterday to speak with members of Congress about the excessive credit card interchange fees that are placing a burden on their businesses.
Meeting with Congressmen were C4CC President Bob Johnson, executive director Jim Conran and Jennifer Cavallaro, owner of The Beehive Café in Bristol, R.I. Other small businesses shared personal stories and urged Congress to immediately reform these fees.
"Credit card companies are notorious for the bad behavior and one of the worst abuses on their list is interchange fees. These swiping fees are costing small businesses and consumers $90,000 a minute -- every minute of every day. This means less money for businesses to hire workers and higher prices for consumers across the board," Johnson said in a statement. "Right now Visa and MasterCard are in a race against each other to charge higher interchange fees in order to give bigger profits to their big bank issuers. I think the American people have already bailed out the banks enough – now it's time to help out small businesses and consumers."
As CSNews Online reported earlier this week, credit card companies charged $48 billion in interchange fees in 2008 alone, up 300 percent since 2001. Every dollar spent on excess interchange fees is another dollar not spent hiring workers or providing savings to customers, according to the group.
Conran added: "Throughout the last decade interchange rates have increased more than 300 percent -- exceeding both health care and energy cost increases by a wide margin. The rates have become excessive and are not reflective of the true cost of actually processing the transaction. As these fees eat up potential profits for small businesses, it means fewer jobs and higher prices at a time when our country can't afford either. With millions of people out of work, we can't ignore the fact that excessive interchange fees are stifling job growth on Main Streets across the country."
Supporters of the Credit Card Con -- including small business owners -- met with their elected representatives and voiced concerns that credit and debit/check card interchange fees hinder job growth and unfairly raise consumer prices.
"I am encouraged that such a diverse group of small business owners can come together from across the country to discuss a critical issue that hurts us all," Cavallaro said in a statement. "I look forward to meeting with my representatives from Rhode Island to discuss ideas for reform that will help small businesses."
The Credit Card Con campaign is seeking the following solutions:
-- Bring debit card transaction fees down to a level at par with personal checks.
-- Transparency in the way transaction fees are assessed and processed.
-- Clear and direct federal regulatory oversight of interchange fees.
On May 22, 2009, President Barack Obama signed the "Credit Card Accountability, Responsibility and Disclosure Act of 2009" or "CARD Act" into law. The legislation included restrictions on interest rates, limits on fees and tough restrictions to protect young consumers, but the CARD Act did not address interchange fees.
Main Street businesses are concerned the big banks and credit card companies will continue to exploit this loophole by raising credit card interchange fees. The CARD Act is slated to go into effect Feb. 22, but Consumers for Competitive Choice is telling Congress that it cannot consider its work on financial regulatory reform complete until excessive interchange fees have been addressed.
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