The battle over credit card interchange takes another step forward next week with the rescheduling of a Senate Judiciary Committee hearing titled, “Credit Card Interchange Rates: Antitrust Concerns?” The hearing will take place the morning of July 19.
NACS and the Merchants Payments Coalition (MPC) are working to ensure this hearing soundly makes the case that merchants and consumers are victims of the antitrust rate setting practices of the mammoth credit card associations. To ensure adequate attention is paid to these proceedings, the MPC has launched an aggressive advertising campaign airing in relevant Washington, DC, media outlets and drawing the attention of key policymakers to what could be a bellwether event in the battle against the credit card associations.
To represent the interests of the convenience store industry, NACS has tapped its 2004-2005 chairman and veteran of multiple congressional hearings, Bill Douglass, CEO of Douglass Distributing Company in Sherman, Texas. On countless occasions, Douglass has proven himself unflappable in the face of congressional inquiry and NACS believes he will be able to deliver compelling testimony regarding the challenges credit card interchange rates present to the industry. Details of his testimony and the hearing will be available next week in NACS Daily.
As one issue takes a step in favor of retailers, another has taken a step back. As reported in NACS Daily this week and in direct e-mail communication to NACS members, the House of Representatives ignored the interests of our industry and approved legislation that essentially authorizes the sale of lottery tickets over the internet. H.R. 4411, the “Unlawful Internet Gambling Enforcement Act,” was approved by a strong bipartisan vote of 317-93 and now heads to the Senate for consideration. NACS has turned its attention to this chamber in hopes of convincing senators that exempting state lotteries from an Internet gaming ban is poor policy -- both from the perspective of convenience and petroleum retailers, as well as from that of anti-gaming advocates. NACS will keep members posted on its progress.
The House Financial Services Committee Subcommittee on Financial Institutions this week held a hearing on legislation introduced by Reps. Paul Gilmore (R-OH) and Barney Frank (D-MA) that would restrict commercial firms from opening financial operations. Such combinations of services are known as industrial loan corporations (ILC) and the issue has gained more exposure since Wal-Mart petitioned to open an ILC in the state of Utah. Concerns about the spread of ILCs derive from the risk that such firms will hold an unfair competitive advantage in their markets and that such institutions are not regulated by the Federal Deposit Insurance Corporation (FDIC), thereby introducing additional and unacceptable risk into the financial markets. FDIC testified that it is reviewing whether it has authority to regulate ILCs, but was uncertain when such a report would be available for congressional review.
Reps. Gilmore and Frank propose to require that ILCs chartered after June 1, 2006, must derive a minimum of 85 percent of their revenues from financial operations. Although the legislation has broad bipartisan support, several members of the subcommittee spoke out against the bill, claiming that it is based upon a bias against big box companies like Wal-Mart. Recently, Wal-Mart and Home Depot have requested FDIC insurance coverage.
NACS has joined other members of the Sound Banking Coalition in support of the Gilmore-Frank bill. Subcommittee Chairman Spencer Bachus (R-AL) told the chamber that he scheduled the hearing at the request of Rep. Jim Leach (R-IA), a strong supporter of the bill, but had not decided whether the subcommittee would take any additional action on the issue.
House Democrats continued their political maneuverings on the minimum wage by successfully attaching non-binding minimum wage language to a Motion to Instruct Conferees to the Perkins Act (an unrelated technical education bill). This vote, which has no direct policy consequences, was a symbolic move that calls for a federal minimum wage "in no case less than $7.25/hour." Sixty-four Republicans joined 195 Democrats to pass this motion. Some of the Republicans who supported the measure noted that they did so to stymie the Democrats’ efforts to use the issue against moderate Republicans in the mid-term election. One Republican classified Democratic efforts to attach the wage hike to any legislation as “despicable” and accused them of “playing class warfare.” Some of these Republicans are currently working on an alternative bill that would result in a higher federal minimum wage.
On Thursday, it was reported that a group of 25 Republicans wrote to House Majority Leader John Boehner (R-OH) requesting a vote on legislation to increase the minimum wage before the end of July. Most of these members could be characterized as moderate Republicans, with many in tight campaigns for reelection. However, their mobilization in support of a wage increase could significantly change the dynamics of this issue in the House of Representatives.
Meanwhile, as the Senate considered legislation making appropriations for the Department of Homeland Security, Sen. John Thune (R-SD) offered an amendment that would transfer from general revenues an amount equal to the penalties paid by automobile manufacturers for violating corporate average fuel economy standards into a program to provide grants to retailers for installing alternative fuel infrastructure. Sen. Thune makes the case that promoting domestic, renewable E-85 is in the national security interests of the United States. NACS previously supported similar legislation that was introduced by Rep. Mike Rogers (R-MI) and Vito Fossella (R-NY) on the basis that using these fees to help offset retail conversion expenses associated with selling E-85. That bill was approved by the House of Representatives; a vote on the Senator’s amendment had not been cast by press time.
Have a great weekend!
John Eichberger
Vice President, Government Relations