WASHINGTON--(BUSINESS WIRE)--The National Retail Federation today welcomed a House-Senate conference committee’s decision to include a fix for rapidly rising debit card swipe fees in the final version of financial services reform legislation approved early this morning.
“This bill will take us a lot closer to a dollar really being a dollar again.”
“The conference committee has struck a blow for small retailers and their customers,” NRF Senior Vice President and General Counsel Mallory Duncan said. “For years, these soaring fees have been taking billions of dollars out of consumers’ pockets and driving up prices. This is unsustainable. With this conference report in hand, Congress has an opportunity to stand up for Main Street businesses and consumers and rein in the greed of the big Wall Street banks and credit card companies.”
“If adopted by Congress and properly implemented by the Federal Reserve, this legislation will put an end to retailers being forced to accept ‘Visa dollars’ that are only worth 98 cents today and whatever Visa decides they’re worth tomorrow,” Duncan said. “This bill will take us a lot closer to a dollar really being a dollar again.”
A House-Senate conference committee negotiating over financial services reform legislation voted 27-16 this morning to approve its final version of the bill, setting the stage for a House vote excepted to take place on Tuesday and a Senate vote later next week.
The conference report includes an amendment sponsored by Senate Majority Whip Richard Durbin, D-Ill., that would require the Federal Reserve to set regulations resulting in “reasonable and proportional” swipe fees for debit cards. The Fed would be required to take into account banks’ actual costs for processing the transactions and the fact that paper checks drawn on the same accounts are paid at face value. The amendment would also make it easier for merchants to offer discounts or other benefits for customers who don’t use credit cards, and to set minimum purchase amounts for credit cards.
Swipe fees – officially known as interchange fees – are a percentage of the transaction charged by card company banks each time a card is swiped to pay for a purchase. The fees average between 1 and 2 percent for debit cards and 2 percent or more for credit cards. Overall swipe fees charged to retailers and other business by Visa and MasterCard banks totaled $48 billion in 2008 and resulted in higher prices estimated by NRF at $427 for the average household. Debit swipe fees alone amount to about $20 billion of the annual total.
As the world's largest retail trade association and the voice of retail worldwide, NRF's global membership includes retailers of all sizes, formats and channels of distribution as well as chain restaurants and industry partners from the United States and more than 45 countries abroad. In the United States, NRF represents the breadth and diversity of an industry with more than 1.6 million American companies that employ nearly 25 million workers and generated 2009 sales of $2.3 trillion.
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