Consumer Groups Ask Congress Not to Delay Swipe Fee Reform
By J. Craig Shearman
Washington Retail Insight
March 31, 2011
A coalition of consumer groups is asking Congress to reject legislation that would delay swipe fee reform scheduled to go into effect this summer.
“The current interchange system is uncompetitive, non-transparent and harmful to consumers,” Americans for Financial Reform said Wednesday in a letter to members of the House and Senate. “AFR does not support congressional delay of implementation of the new law.”
AFR is a coalition focused on financial services industry reform that includes the Consumer Federation of America, the U.S. Public Interest Research Group and a number of other consumer organizations among its 250 national, state and local members.
NRF welcomed the coalition’s support on the issue.
“Consumer groups want to see these skyrocketing fees brought under control,” NRF Senior Vice President and General Counsel Mallory Duncan said. “Contrary to banks’ claims, this is not a business-to-business issue – this is the big banks against everybody else. Swipe fees have been driving up prices for our customers for years. These groups are saying it’s time to do something about it, not time to derail reform through further study.”
The AFR letter comes as the banking industry is pushing for passage of legislation introduced last month that would delay swipe fee reform and require a study of the issue. One bill sponsored by House Financial Institutions and Consumer Credit Subcommittee Chairwoman Shelley Moore Capito, D-W.Va., would delay implementation by a year while another introduced by Senator Jon Tester, D-Mont., calls for a two-year delay.
Federal Reserve Chairman Ben Bernanke said on Tuesday that while the Fed will not be able to meet an April 21 deadline to finalize swipe fee reform regulations, it will be able to do so in time for the new rules to take effect on July 21 as scheduled.
Regulations proposed by the Fed in December would lower debit card swipe fees from their current level of 1 to 2 percent of each transaction to a flat fee of no more than 12 cents per transaction for large banks that adhere to fees set by the card companies. Banks that set their own rates would be free to charge any fee they believe the market would bear provide that they do so independently. The move would reduce the current $20 billion a year in debit swipe fees by about 70 percent, or $1.2 billion a month. Financial institutions with less than $10 billion in assets are exempt.
© 2011 National Retail Federation
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