March 29, 2011 06:36 PM Eastern Daylight Time
WASHINGTON--(BUSINESS WIRE)--The National Retail Federation welcomed today’s commitment by Federal Reserve Chairman Ben Bernanke that the agency will complete final swipe fee reform regulations in time for retailers to begin offering customers discounts and other benefits this summer as scheduled.
“The banking industry and some in Congress want to delay swipe fee reform for as long as two years, but Chairman Bernanke has made it clear that the Fed doesn’t need a delay in implementation”
“Retailers want to begin passing on swipe fee savings to their customers as soon as possible, and today’s announcement means those plans will be able to move forward as planned despite the anti-consumer efforts of some in Congress,” NRF Senior Vice President and General Counsel Mallory Duncan said. “The Fed has received thousands of comments on this proposal and it is appropriate for that input to be carefully and thoroughly reviewed. If they take a few extra weeks, we understand.”
“The banking industry and some in Congress want to delay swipe fee reform for as long as two years, but Chairman Bernanke has made it clear that the Fed doesn’t need a delay in implementation,” Duncan said. “Congress held seven hearings and ordered two GAO studies of swipe fees before enacting this law last year. Congress has made its decision and should allow the Fed to complete its work. Delay beyond this summer’s deadline would amount to a $1 billion-a-month bailout for big banks.”
Bernanke said today that the high volume of comments received by the Fed and the issues they have raised mean the agency will slip beyond an April 21 deadline to complete final regulations. But he acknowledged that swipe fee reform legislation enacted last year will take effect on July 21 even without regulations and said “we are committed to completing the rulemaking for that provision in advance of that date.”
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.
Merchants are making a wide variety of plans to pass the savings along to customers who use debit cards, ranging from discounted prices to benefits and increased services such as free delivery at an appliance store, but would be unable to do so if reform is delayed. Some of the moves, such as hiring more sales associates to help customers, could result in significant job creation.
Legislation introduced earlier this month by House Financial Institutions and Consumer Credit Subcommittee Chairwoman Shelley Moore Capito, D-W.Va., would delay implementation of swipe fee reform by a year and require a study of the issue. A similar bill introduced by Senator Jon Tester, D-Mont., calls for a two-year delay.
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 $2.4 trillion. www.nrf.com
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