WASHINGTON — Retailers were still hopeful last week that measures regulating credit- and debit-card interchange fees would be incorporated into the massive financial reform legislation that was stalled in the Senate last week.
“We are pursuing all avenues, including that avenue, but by no means is that an easy pass given the nature of that bill,” said Jennifer Hatcher, group vice president, government relations, at Arlington, Va.-based Food Marketing Institute.
Debate on the Restoring American Financial Stability Act of 2010, which seeks to create new oversight of the financial system and add consumer protections, is expected to last at least two weeks, and several amendments could be added, including some regulating the transaction fees assessed by credit-card issuers on merchants. A House version of the bill passed in December.
A group of 55 trade associations — including FMI and National Grocers Association — sent a letter to every member of the Senate last month asking that credit-card fee reform be included in the financial overhaul bill. The letter asks the Senate to allow merchants to set minimum and maximum transaction levels and to steer customers to less expensive forms of payment. It also asks the Senate to authorize the Federal Reserve to treat debit cards like paper checks.
“Debit transactions are not an extension of credit, and unlike a credit-card transaction, the funds are directly drawn from a consumer's checking account,” the letter stated. “Accordingly, debit-card transactions should clear at-par (i.e., face value) just as paper checks do today.”
As of last month, Visa increased the fees for debit-card transactions by about 30%, Hatcher said, calling it “the latest gasoline on the fires of outrage.”
Separately, the House Judiciary Committee held a hearing last week on the Credit Card Fair Fee Act, which seeks to allow merchants to negotiate transaction fees collectively with credit- and debit-card issuers. Hatcher said FMI was “encouraged” that the legislation could be marked up soon.