WASHINGTON — The House last week voted to pass the reconciled financial reform bill, which includes a provision to regulate debit-card interchange fees, but a Senate vote was delayed until mid-July.
The House voted 237-192 to approve the conference report to H.R. 4173, the Dodd-Frank Wall Street Reform and Consumer Protection Act, which seeks to prevent the type of banking failures that occurred in 2008 but also for the first time introduces regulatory oversight of interchange fees. The Senate is not expected to vote on the bill until after it returns on July 12, according to reports.
“We applaud the House for approving this bill to bring reasonable regulation to interchange swipe fees set by the banks and credit card companies,” said Leslie G. Sarasin, president and chief executive officer, Food Marketing Institute, in a prepared statement. “This vote is incredibly important to both merchants and consumers and is the beginning of a process that will provide greater transparency in credit and debit transactions. It will give merchants the ability to more efficiently plan their operational costs for the benefit of their customers.”
As reported in the June 28 issue of SN, retailers have long sought government intervention on the interchange fees, which are charged for each transaction and account for billions of dollars per year in expenses for retailers across the country. The legislation, if passed by the Senate — which some reports said remained a matter of some doubt last week — and signed by President Obama, would force card issues to charge interchange fees that are “reasonable and proportional” to their actual costs and would give merchants new flexibility in reducing their own costs.
Arlington, Va.-based FMI and the National Grocers Association are members of the Merchant Payments Coalition, a group of dozens of associations that accept credit and debit cards and which have collectively appealed for government intervention on the card fees.
“The House has sent a clear message that big banks shouldn't be allowed to drive up consumer prices by charging fees that are outrageously out of proportion to the actual cost of processing a transaction,” said Mallory Duncan, senior vice president and general counsel, National Retail Federation, Washington.