This week NACS unleashed a grassroots firestorm in support of amendments to the financial services reform package that could ease the pain of swipe fees. Sen. Richard Durbin (D-IL) stood up for merchants across the country when he introduced his two amendments (see details below).
Retailers must continue to build the groundswell of attention to swipe fees. This is what we have been asking for and now is the time to tell your senators to take action. Our opposition is well organized and well funded €" we cannot underestimate them. They took notice of our efforts and are pushing Senate leadership not to vote on our amendments. If there is no vote, then the banks win.
Click here for a list of Senate phone numbers, make your call and pass on the word for others to call. Your message should be, "I am counting on your support of the Durbin/Leahy/Landrieu Amendment #3771 and the Durbin Amendment #3769. I am counting on you to tell Senate leaders there must be a vote on these amendments."
The first is the Durbin-Leahy-Landrieu Amendment #3771 to stop credit/debit card networks from imposing anti-competitive restrictions on the small businesses, merchants and government agencies who accept their cards. The amendment would say that sellers can do the following things without being threatened or punished by card networks like Visa and MasterCard:
- Offer discounts to customers to use a competing card network (e.g., the amendment would let a store that accepts Visa offer a discount for a customer to use MasterCard or Discover. Visa currently prohibits such discounts);
- Offer discounts for use of cash, check, debit card or stored-value card (current law does not fully ensure that merchants can offer these discounts); and
- Set a minimum or maximum transaction amount for payment by card (small businesses lose money on transactions when they cannot set these amounts)
The second is Durbin-Specter-Whitehouse Amendment #3769 to ensure that interchange fees charged for debit card transactions are reasonable and proportional to the costs incurred in processing the transaction.
- With this amendment, Visa and MasterCard will be prevented from continuing to increase debit card interchange fee rates, which currently amount to 1% to 2% of the transaction amount even though the actual cost of processing a debit transaction is far less.
- The amendment would direct the Fed to issue regulations to ensure that interchange fees imposed on debit card transactions be "reasonable and proportional" to the cost incurred in processing the transaction. (The rules would have a carve-out for small bank debit cards).
NACS Staff Contact: Lyle Beckwith
Vermont's House and Senate unanimously passed landmark legislation earlier this week that directly addresses credit card interchange fees and other practices by the credit card companies. If signed by Vermont€™s Governor Jim Douglas, the law will take effect January 1, 2011.
The Vermont Retail Association and the Vermont Grocers Association, who combined represent more than 1,000 Vermont businesses, "were instrumental" in supporting the legislation, especially noting the lack of negotiating power that the individual businesses have when dealing with credit card companies. Both associations worked intensively with legislators, businesses, and the card companies to help steer the bill to passage.
Key points of the new legislation include:
- Merchants can set card purchase minimums up to $10.
- Merchants can offer discounts or other benefits for payment by lower-cost cards or cash.
- Merchants can refuse credit cards in one or multiple locations.
- Directs the Vermont Banking & Insurance Department to review interchange fees charged to merchants and make recommendations to the legislature.
- Imposes significant penalties for the implementation of credit card skimming devices.
This law will provide immense benefits for Vermont businesses and consumers. It may also pave the way for similar legislation in other states nationwide. The Vermont house and senate leadership deserve special praise for their role in passing this groundbreaking legislation," said Tasha Wallis, Executive Director of the Vermont Retail Association,
The new law gives hundreds of small businesses here much-needed protection against abusive practices by the credit-card companies. It represents overdue restraint of an out-of-control industry," said Jim Harrison, President of the Vermont Grocers Association.
NACS Staff Contact: Lyle Beckwith
Sen. Lindsey Graham (R-SC) had been working with Sens. John Kerry (D-MA) and Joe Lieberman (I-CT) on climate change legislation but a spat over immigration with Senate Majority Leader Harry Reid (D-NV) led him to drop out of the discussions. A draft of the trio€™s bill was expected last week and yesterday Lieberman said they are preparing to roll out the bill without Graham.
"He€™ll be supportive but not with us," Lieberman said. "I prefer it the other way, but we€™ve got enough support that we want to get it started." Kerry also indicated that they may proceed without Graham officially on the bill but did not confirm any decisions had been made.
Climate change legislation has a lot of hurdles to clear; the recent oil spill in the Gulf of Mexico has complicated the debate. According to Reid€™s top energy and climate aide, Chris Miller, "It€™s unclear whether there will be bipartisan support. We are hopeful, given the short time frame, that we€™ll get some support, because if we don€™t, chances we€™re going to be able to legislate on this year and in the next few years is going to decline significantly."
NACS Staff Contact: Corey Fitze
The Senate Finance Committee hopes to move a $10 billion package of small business incentives sometime this month. Chairman Max Baucus (D-MT) has asked members to hold off on trying to amend the bill with unrelated provisions. It seems however that pressure to do something about the estate tax may thwart his efforts.
If Congress does not take action the estate tax will go back to 55 percent and in an election year it is obvious this would not be popular with the electorate. Sens. John Kyl (R-AZ) and Blanche Lincoln (D-AR) have been advocating for a lower rate (35 percent) and an increase in the exemption level to $5 million per spouse. Kyl feels that this small business incentive package could be just the vehicle for considering the issue. Other Senators feel that any controversial topic should be off the table so that the package can easily pass.
A committee vote could occur as early as next week.
NACS Staff Contact: Corey Fitze