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The signing on of Sen. Christopher "Kit" Bond (R-Mo.) as a co-sponsor of the Credit Card Fair Fee Act of 2008 demonstrates that lawmakers from both political parties are increasingly concerned about the hidden fees, according to the National Retail Federation.
"The addition of Sen. Bond to this bill underscores the bipartisan support for fixing this problem," said NRF s.v.p. and general counsel Mallory Duncan. "Protecting retailers and their customers from the greed of credit card companies is an issue that crosses party lines. The public thinks it's time to do something about these fees, and members of Congress are responding."
This week Bond became the lead co-sponsor of S. 3086, which was introduced two weeks ago by Senate majority whip Richard J. Durbin (D-Ill.). The legislation is Senate counterpart of H.R. 5546, also named the Credit Card Fair Fee Act of 2008, which was introduced by House Judiciary Committee chairman John Conyers (D-Mich.) and Rep. Christopher Cannon (R-Utah) in March. The Conyers/Cannon bill has 37 further co-sponsors -- 21 Democrats and 16 Republicans.
Both measures would require credit card systems with "substantial market power," such as MasterCard and Visa, to negotiate with merchants to reach a voluntary agreement on credit card terms and conditions. If an agreement could not be reached, both sides would have to submit their final offers to binding arbitration by a panel of antitrust experts appointed by the Department of Justice and FTC.
At issue are the non-negotiable credit card interchange fees averaging nearly 2 percent that Visa and MasterCard banks charge merchants each time a credit card or signature debit card is used to pay for a transaction.
According to NRF, the average U.S. family will pay $427 in hidden credit card interchange fees this year, up from $378 in 2007. The amount has almost tripled from the $159 paid in 2001, the year NRF began tracking the fees. Total interchange collections are projected to hit $48 billion in 2008, up from $42 billion last year and $16.6 billion in 2001.