Interchange Wars
Two More Congressional Bills Aim at Interchange Regulation
(Digital Transactions) U.S. Sen. Richard Durbin’s introduction this week of a Senate companion to U.S. Rep. John Conyers Jr.’s Credit Card Fair Fee Act of 2009, along with a little-noticed bill introduced last month in the House, bring to three the number of interchange bills pending in the Democrat-controlled Congress. And while the bill from Conyers, the Michigan Democrat who chairs the House Judiciary Committee, has received most of the publicity (Digital Transactions News, June 8), the bills from Durbin and U.S. Rep. Peter Welch, D-Vt., may represent the more serious threats to the bank card status quo.
The Welch bill, H.R. 2382, would ban the card networks from setting higher interchange rates for premium cards than for non-premium cards. Welch’s bill also would overturn many of the networks’ longstanding rules to prevent merchants from discriminating against card-using customers.
And Durbin’s bill, S. 1212, revives the idea of federal payment-system judges to oversee interchange rate setting between merchants and the card networks. Conyers first proposed payment judges in his original draft last year, and Durbin, the Senate majority whip, followed suit in his chamber. They dropped the idea during the legislative process. Under Durbin’s new bill, the U.S. attorney general and the chairman of the Federal Trade Commission would appoint three judges who would oversee a rate-setting process that would kick in if merchants and networks couldn’t reach voluntary agreements on interchange after three months of negotiation.
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