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WASHINGTON -- Another politician is asking for insight into the fees credit card companies charge merchants. At the House Financial Services Subcommittee hearing last week, U.S. Rep. Melvin Watt (D-N.C.), requested interchange fees be a focus at future hearings, according to the Merchant's Payments Coalition (MPC).
"Another major issue is interchange fees, hidden charges that nobody has focused on yet, but I hope we will get some testimony at this and subsequent hearings," Watt said at the hearing.
Last week's session was the third in 2007 where members of Congress called for a probe of credit card interchange-related practices and policies, according to the group. The MPC commended Watt for his comments:
In addition, a recent report by Diamond Management & Technology Consultants found credit card companies spend 13 percent of interchange fees on transaction processing, while the remainder goes toward reward programs and direct mail campaigns.
Watt observed during the hearing: "I get a solicitation a day asking me to take out a credit card -- someone is paying for those mailings."
There are 15 pieces of legislation pending in nine states relating to credit card interchange fees and abusive credit card company practices.