NRF backs House-Senate conference committee approval of debit card-related fee
Staff Staff -- Furniture Today, June 25, 2010
Washington - The National Retail Federation today said it 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.
"The conference committee has struck a blow for small retailers and their customers," said Mallory Duncan, svp and general counsel, NRF. "For years, these soaring fees have been taking billions of dollars out of consumers' pockets and driving up prices."
If adopted by Congress and implemented by the Federal Reserve, he continued, "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. This bill will take us a lot closer to a dollar really being a dollar again."
This morning, a House-Senate conference committee negotiating over financial services reform legislation voted 27 to 16 in favor of its final version of the bill. A House vote is expected to take place June 29 followed by 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. Specifically, 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, which are 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% for debit cards and 2% or more for credit cards.
Overall swipe fees charged to retailers and other business by Visa and MasterCard banks totaled $48 billion in 2008. The pass-along to consumers resulted in higher prices estimated by NRF at $427 for the average household, according to the association. Debit swipe fees alone amount to about $20 billion of the annual total, the NRF noted.
Industry Related Content
Furniture Today's Ray Allegrezza Speaks with Stephen Bogart about Fine Furniture's New Bogart Line