Enactment of the Dodd-Frank Wall Street Reform law last year included a provision known as the Durbin Amendment. The Durbin Amendment requires the Federal Reserve to set forth rules regulating how swipe fees on debit transactions are set by the credit card companies. Given the guidance to consider the costs banks incur when processing paper checks, the Fed was instructed to make sure that the fees charged for debit transactions (electronic checks) were "reasonable and proportionate to the cost." NACS and the Merchant Payment Coalition (MPC) argued that since the cost to banks to process paper checks was much higher than for electronic checks, the fee should be no higher than paper checks??which is zero.
In December, after extensive analysis, the Federal Reserve released their first draft of these regulations which include limiting the per transaction fee for debit purchases to between 7 and 12 cents. This represents a reduction of fees of approximately 80%. Yet according to the Federal Reserve, is more than enough to offset the cost of processing these transactions and provide a healthy profit to the largest banks (over $10 billion) that are covered by the law. All but the 3 largest federal credit unions and all community banks are exempt from the law. The final regulations are due in April, with an effective date of mid-July.
Fearing the loss of billions of dollars in revenue, the credit card and banking lobby has set forth on a massive campaign to repeal or delay implementation of the Durbin Amendment. Hearings have already been discussed in both the House and the Senate. Although the Durbin Amendment enjoyed broad bi-partisan support, the banking lobby believes that the change in Congress after the elections gives them the opportunity to defeat merchants.
NACS and the other members of the Merchant Payment Coalition have worked for 7 years achieve this tremendous accomplishment. Don??t let the banks seize control of this issue. The banking lobby has announced that they will be storming the Hill throughout the month of February to push for repeal of the Durbin Amendment. They have indicated they will bring hundreds, if not thousands of bankers to DC to lobby Congress.
If maintaining our victory on debit swipe fee reform is important to you, it is essential that you attend NACS?? Day on the Hill on March 9-10.
Please click here as soon as possible to register. This victory was made possible by the tremendous grassroots response of retailers fighting against these outrageous fees. Do not let the bankers get away with misleading Congress about what it does!
NACS Staff Contact: Lyle Beckwith, lbeckwith@nacsonline.com
- Senate Democrats and Republicans have been especially eager to pass a repeal of the much-maligned 1099 tax provision of the health care law, and now it seems the House is ready to act as well. A spokesperson for the House Ways and Means Committee said the panel would be "acting soon" to put a repeal bill through committee and onto the floor.
- In the House Ways and Means Committee this week Administration officials disputed criticisms from Republicans that the overhaul law will harm small businesses and the overall economy. They reiterated that the law will bring down costs throughout the health care system as well as make coverage more accessible and affordable for small businesses. Republicans were skeptical that the tax credits would prove beneficial to small businesses and were critical of requirements that employers provide coverage to their workers or face penalties. Chairman of the Committee, Dave Camp (R-MI) said, "Employers of all sizes are expressing concern that the new mandates and regulations will deter them from hiring new employees, threaten their ability to retain existing workers, and harm their ability to increase wages for existing employees. The new health care law compounds the uncertainty employers and entrepreneurs are facing amid the most challenging economic climate since the Great Depression."
- Senate Republicans introduced their own version of a repeal of the Patient Protection and Affordable Care Act. It is unlikely that the package will ever make it to the floor for a vote but it is symbolic of the Republican Party??s push to position themselves against the reform.
NACS Staff Contact: Julie Fields, jfields@nacsonline.com
Last fall the Food and Drug Administration (FDA) issued draft guidance to the food service industry that was intended to start a conversation about how menu labeling provisions of the health care law would be implemented. The guidance proved to be confusing to all and just this week the FDA announced they would be pulling the guidance document from the docket. They will now proceed with issuing a proposed rule and final regulations.
The proposed rule must be issued by the end of March 2011. Then there will be a comment period during which NACS and other affected entities will review the rule and submit opinions.
It is likely that a final rule will be issued sometime at the end of the year and then enforcement would begin sometime in 2012.
NACS will continue to work with everyone involved to make sure that our stores are recognized for their unique business models and that the outcome of the rule is workable for all affected companies.
NACS Staff Contact: Julie Fields, jfields@nacsonline.com