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    Technology Trends Alert: Improving credit

    Packaged with my new Chase Continental Airlines OnePass debit card was a host of literature telling me of all the wonderful benefits I’ll receive if I don’t use it for pin debit transactions. It even went so far to suggest that I opt out whenever the payment terminal automatically asks for my PIN number. Such stepped-up marketing is likely part of the credit card industry’s response to the Credit Card Fair Fee Act (HR 5546) introduced last month by House Judiciary Chairman John Conyers (D-Mich.) and Congressman Chris Cannon (R-Utah) in an effort to rein in interchange fees assessed by credit card companies.

    Packaged with my new Chase Continental Airlines OnePass debit card was a host of literature telling me of all the wonderful benefits I’ll receive if I don’t use it for pin debit transactions. It even went so far to suggest that I opt out whenever the payment terminal automatically asks for my PIN number. Such stepped-up marketing is likely part of the credit card industry’s response to the Credit Card Fair Fee Act (HR 5546) introduced last month by House Judiciary Chairman John Conyers (D-Mich.) and Congressman Chris Cannon (R-Utah) in an effort to rein in interchange fees assessed by credit card companies.

    The legislation would require a committee of merchant, card company, and bank representatives to negotiate uniform fees for debit and credit card transactions, according to the Food Marketing Institute (FMI). If the negotiators cannot reach an agreement, the decision would move to binding arbitration by a panel of experts, the FMI stated. Fees would remain in effect for three-year periods and could be renegotiated at the end of each period if costs and market conditions change, the organization stated.

    "This law would restore fairness and reason to an anti-competitive, anti-consumer and broken electronic payments system," FMI president and CEO Tim Hammonds said.

    The newly introduced bill would not set prices; rather it would require that credit card fees, including interchange, are set in a transparent manner in an effort to encourage companies to compete for business and preventing consumers from paying artificially high rates, Cannon said in a statement on his Web site.

    In July 2007, the House Judiciary Antitrust Task Force Subcommittee conducted a hearing to investigate competition in the credit card marketplace, and the Credit Card Fair Fee Act is a direct result of the task force's examination, according to the MPC.

    "In the end, credit card companies should set whatever fees the market will tolerate," Cannon added. "This bill is a win for consumers, for retailers and for the credit card industry which will benefit from competition."

    Bi-partisan co-sponsors of the Credit Card Fair Fee Act include: Representatives John Boozman (R- Ark.), William Delahunt (D-Mass.), Louie Gohmert (R-Texas), Ralph Hall (R-Texas), Zoe Lofgren (D-Calif.), John Peterson (R-Pa.), Todd Platts (R-Pa.), Bill Shuster (R-Pa.), John Sullivan (R-Okal.), Anthony Weiner (D-N.Y.) and Peter Welch (D-Vt.) and Joe Wilson (R-S.C.), according to the MPC.

    Related Links:

    H.R. 5546: To amend the antitrust laws to ensure competitive market-based rates and terms for merchants' access to electronic payment systems (Full text.)

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