WASHINGTON — The House and Senate agreed on a massive financial reform package early Friday morning that will include federal oversight of debit-card interchange fees for the first time.
The compromise version of the Restoring American Financial Stability Act of 2010 is expected to go before a full vote in both houses of Congress within days. It includes an amendment that requires debit-card issuers to set interchange fees at levels that reflect the actual cost of processing transactions and gives merchants new flexibility to reduce their costs.
“[Food Marketing Institute] and our members have had interchange fee reform at the top of our list of priority issues for the past decade,” said Leslie G. Sarasin, FMI president and chief executive officer. “These fees represent the fastest growing expense of our retail members and the only one over which we have zero control. This compromise is a good deal for consumers and is a strong step forward for competition.”
Retailers will gain new power to offer discounts to consumers for paying with cash, checks or debit cards, and will be able to set a minimum level — not to exceed $10 — for purchases using a credit card. The legislation does not cover government-issued benefit cards and prepaid debit cards, although FMI said it would continue to pursue regulation of stored-value debit cards as well.
"Giving the Federal Reserve the regulatory authority to assure debit interchange fees are reasonable and proportional to the cost incurred by the issuer represents an important first step to leveling the playing field for consumers and merchants," said Thomas K. Zaucha, president and CEO of the National Grocers Association. "This achievement is a testament to the value of grassroots action by NGA members in their strong outreach to members of Congress on this critical issue."
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