You are here
One hundred and thirty-four trade organizations, among them such food retailing industry stalwarts as Food Marketing Institute and the National Grocers Association have signed a letter addressed to all members of the U.S. Senate and endorsing an amendment to the Restoring American Financial Stability Act of 2010 sponsored by Senate Majority Whip Richard Durbin (D-Ill.) that will address excessive debit card swipe fees and the practices of credit card companies and the banks that issue their cards.
Other retail groups supporting the amendment are the National Association of Convenience Stores, the National Retail Federation, and the Retail Industry Leaders Association, which drafted the letter.
The amendment would free merchants of anti-competitive restrictions imposed by the credit card companies, enabling merchants to offer discounts when customers use less expensive forms of payment, as well as directing the Federal Reserve to issue regulations to ensure that swipe fees imposed on debit card transactions are “reasonable and proportional” to the cost of processing the transaction.
“Interchange swipe fees have grown exponentially over the past decade and are one of the highest costs of doing business in our industry. Just last month, Visa Interlink raised rates an estimated 30 percent on PIN debit transactions without any justification,” said FMI president and CEO Leslie G. Sarasin. “We hope the Senate will choose to protect community retailers from these kind of abuses by supporting this commonsense amendment today.”
Over 80 percent of all interchange fees go to the 10 largest banks. Sen. Durbin’s amendment exempts all banks, credit unions and thrifts with assets under $1 billion, which means that 92 percent of all banks, 98 percent of all credit unions and 86 percent of all thrifts would be exempt from the law.
“By modifying his amendment to affect only banks with $10 billion or more in assets, Sen. Durbin is ensuring a narrow focus on those problem actors,” noted the Washington-based Merchants Payments Coalition, a group of retailers, supermarkets, drug stores, convenience stores, fuel stations, online merchants and other businesses working against interchange fee system.
The letter bears the signatures of 57 national associations and 77 state trade associations. Among the state groups represented are the New Jersey Retail Merchants Association, Virginia Petroleum, Convenience and Grocery Association, West Virginia Oil Marketers and Grocers Association.
In the last year, small business owners have amassed almost 4 million petition signatures from their customers and presented them to members of Congress, in an effort to reform the fees.