National Council of Chain Restaurants Expresses Deep Disappointment in Final Swipe Fee Rules

For Immediate Release
Contact: Scott Krugman (202)783-7971
krugmans@nrf.com      

National Council of Chain Restaurants Expresses Deep Disappointment in Final Swipe Fee Rules

Washington, June 29, 2011 -- The National Council of Chain Restaurants expressed deep disappointment and significant concern over final debit card swipe fee regulations approved today by the Federal Reserve.

Under the new regulations, the current debit card swipe fee rate of one-two percent of each transaction – about 44 cents on the average retail purchase – will be replaced with a flat fee of 21 cents per transaction for the nation’s largest banks. That is significantly higher than the flat fee of up to 12 cents the Fed originally proposed in December 2010.  Today’s rule comes three weeks after the Senate voted to allow the rules to be implemented as scheduled this summer, defeating an amendment meant to delay and derail the reforms.

“Thousands of chain restaurant locations and millions of their customers that rely on debit cards will be disproportionately harmed by the new rules which provide no relief from the growing mountain of unfair and hidden swipe fees imposed by the big banks,” said Rob Green, NCCR Executive Director.

In comments submitted to the Federal Reserve Board about the impact of swipe fees on chain restaurants, NCCR argued that high interchange transaction fee levels would be particularly burdensome on chain restaurants in connection with small-ticket transactions. 

“We are very disappointed that the Fed deviated so far from its original proposal, which was based on the intent of Congress,” said Green. “The Fed chose to abandon any recognition of how hidden swipe fees impact many chain restaurants and their customers.”  

NCCR has argued that debit card transactions should be honored at or close to zero cost since debit cards function as plastic checks that draw from the same bank accounts as paper checks.  Debit and credit card swipe fees together amount to about $50 billion a year, and drive up prices by an estimated $427 a year for the average household because of card industry prices that effectively require the fees to be included in the price of merchandise.

The National Council of Chain Restaurants is the leading trade association exclusively representing chain restaurant companies. For more than 40 years, NCCR has worked to advance sound public policy that best serves the interests of both chain restaurants and the millions of people they employ. NCCR members include some of the country’s largest and most respected quick-serve and casual dining companies.  The National Council of Chain Restaurants is a division of the National Retail Federation, the world's largest retail trade group. www.nccr.net

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