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    Visa Exec. Explains Stance on Credit Card Bill

    Claims state passage would hold back competition and innovation, and put consumers, small banks and credit unions at risk.

    NEW YORK -- While proponents of H.R. 5546, or the Credit Card Fair Fee Act, celebrated the passing of the bill by the House Judiciary Committee last week, opponents of the bill, including Visa Inc., issued statements arguing the bill's flaws, stating the bill is, among other things, "anti-consumer."

    "The markup of H.R. 5546 only raises more questions and concerns about an already bad bill," Josh Floum, general counsel for Visa, said in a statement. He added that if it became law, the bill would "mandate unnecessary regulatory intervention into a fiercely competitive industry that is benefiting consumers, merchants and financial institutions."

    In addition, the bill would suppress competition and innovation, and result in unintended and harmful consequences for consumers, small banks and credit unions, he said, explaining those institutions rely on interchange to provide banking services.

    "This legislation would essentially legalize collusion among the nation's largest and most profitable retailers at the expense of consumers, community banks and credit unions," he said, noting the Department of Justice and the Federal Trade Commission already stated this type of legislation will reduce competition and harm consumers.

    "The retail federation wants all of the benefits of the payments system -- guaranteed payment, convenience, risk management, reliability and increased sales volume -- but wants to shift their cost of doing business onto the backs of consumers," he said, giving Australia as an example. The country adopted a similar regulatory policy, and saw retailers' fees drop, profits rose and consumers were "harmed through less choice, higher prices, fewer rewards and benefits, as well as check out fees imposed by retailers at the checkout counter," he said.

    Floum continued: "This anti-consumer approach undermines decades of sound U.S. competition policy by mandating what the U.S. government is generally not in the habit of doing --tepping in between business entities and picking favorites; creating a system that is inherently anti-consumer and pro-retailer."

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