Aims to Reach 60 Votes to Obtain Review of Embattled Fed Interchange Price Caps
Move comes as giant retailer shirks recent data security breach recovery onto card issuers, consumers
WASHINGTON, May 18, 2011 /PRNewswire/ -- On the Senate floor today, Senator Jon Tester (D-MT) announced that he would amend his Debit Interchange Fee Study Act (S. 575) to shorten the study period of Fed interchange price caps from two years to fifteen months. Tester noted that the move is designed to attract the 60 votes necessary to overcome a filibuster by supporters of the Durbin debit card price fixing amendment.
"Almost every day, a new voice speaks out in support of protecting consumers, community banks and credit unions," Tester said. "We're close to having the votes now, but some have expressed concern about the length of the review process. The fact is, how long the study takes is not as important as how thorough it is. Once the facts are out, I have no doubt that reasonable people will agree about how dangerous these price caps are."
Tester's announcement came as another example highlighted the consumer protections provided by debit interchange. Michaels stores recently announced a data security breach impacting more than 100 million customers in 20 states across the nation. Ironically, the breach was initially announced in Senator Durbin's home state of Illinois. In response to consumer inquiries about the loss of sensitive financial information, Michaels directed customers to "contact their bank[s] immediately" for assistance. Losses due to debit card fraud are paid by the issuing banks rather than by the cardholders, and the Michaels incident illustrates how the current system works for the benefit of consumers and merchants as fraud protection and data security are included in the interchange fees retailers pay to card issuers. If the current proposed rule were in place today, financial institutions would not have the resources necessary to guard the security of the networks or to protect consumers from the extensive harm that can result from the violation of their personal information such as fraud and identity theft.
"If the current rule goes into effect, retailers will pass on the costs of fraud protection and data security to consumers," said Trish Wexler, spokeswoman for the Electronic Payments Coalition. "If a breach does occur, retailers will get off scot free, even if they are responsible for the loss. This is just another example of why we need to slow this rule down and get it right before it is too late."
About the Electronic Payments Coalition
The Electronic Payments Coalition (EPC) includes credit unions, banks, and payment card networks that move electronic payments quickly and securely between millions of merchants and millions of consumers across the globe. EPC's goal is to protect the value, innovation, convenience and competition in today's growing electronic payments system. EPC educates policymakers, consumers and the media on the system's role in economic growth, and the importance of protecting consumer choice and stability for the continued growth of global commerce.
SOURCE Electronic Payments Coalition
