WASHINGTON – As announced in last Friday’s Washington Report, the U.S. House Financial Services Committee is holding a hearing today on the Credit Card Interchange Fees Act of 2009 (H.R. 2382). NACS supports H.R. 2382 bill because it would begin to unravel the onerous requirement that credit card companies place on retailers, such as mandating that retailers accept all cards at all locations and therefore limiting the ability to provide discounts for alternative forms of payment, and imposing Reason Code 96 chargebacks.
The hearing begins at 10:00 a.m. EDT and can be viewed live on the committee’s Web site. NACS and SIGMA submitted a joint statement for the record and Mallory Duncan, senior vice president and general counsel of the National Retail Federation, is testifying today on behalf of the Merchants Payments Coalition.
“Our industry now pays more to credit card companies to simply process our card payment transactions than we earn in pre-tax profits. Specifically, in 2008, the entire convenience store industry made a total of $5.2 billion in pre-tax profits; however, our industry paid $8.4 billion in fees to the credit card industry,” wrote NACS and SIGMA, reminding the Committee the original purpose of interchange fees: compensation for the cost of processing a transaction. “That is perfectly fair. But what started out as a fee to cover a legitimate cost has grown out of control. Even though the costs of processing have dropped dramatically, interchange has continued to rise — and is doing so faster than any other cost our industry faces.”
The hearing comes just one week after 7-Eleven delivered 1.6 million consumer signatures to Congress collected during its “Stop Unfair Credit Card Fees” petition drive. Rep. Peter Welch (D-VT) — the author and lead sponsor of H.R. 2382 — joined 7-Eleven franchise owners last week as they delivered the petitions and called for an end to unfair and non-negotiated credit card fees. He will also testify at today’s hearing.
NACS grassroots outreach efforts have already generated thousands of constituent letters from retailers to their elected officials in Congress to support credit card interchange reform. Reach out to your representative and ask him/her to support H.R. 2382 by calling the Capitol Switchboard at (202) 224-3121 and asking to be transferred to your member’s office.
Look for coverage of the hearing in Friday’s Washington Report.