Connective Politics Pay Off in Interchange Reform

Jul 26, 2010 12:00 PM, By MARK HAMSTRA Retail/Financial Editor mark.hamstra@penton.com


     ShareThis     

It's safe to say that Rich Niemann Sr. and Sen. Dick Durbin, D-Ill., don't see eye to eye on all issues.

Niemann, chairman of Niemann Foods in Quincy, Ill., favors a minimally intrusive style of government in which businesses are subjected to less regulation. Durbin, the Senate Majority Whip, is a leader in the Democratically controlled Congress, which has been actively promulgating new legislation, from health care reform to finance reform.

Hamstra

But despite their ideological differences, Niemann had long ago forged a personal relationship with Durbin built around open communication and mutual respect. That relationship turned out to be a factor in the inclusion of debit-card interchange fee regulation in the financial reform bill, which President Obama signed into law last week.

“I have been laying this issue out in front of him for five years,” Niemann told SN, noting that credit- and debit-card interchange fees — assessed by card issuers on every transaction — can eat up much of a retailer's margin.

 Related Articles

Niemann Foods
Niemann Foods' annual sales, number of corporate stores, top executive, headquarters city and website, as reported in SN's 2010 Top 50 Small Chains and Indepdendents, plus links to other Niemann Foods stories....

Durbin added an amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act while it was in the Senate that will for the first time regulate those interchange fees. The amendment was preserved in the version of the bill that was reconciled with the House version, and has now become law.

The Federal Reserve will now set regulations resulting in “reasonable and proportional” interchange fees for debit cards in an effort to curb what retailers have long claimed were abusive practices by card issuers. It also includes rules that will give retailers more flexibility to reduce their costs through marketing alternative forms of payment to consumers and by allowing them to shop for low-cost payment processors.

Retail associations, including Food Marketing Institute, National Grocers Association and National Retail Federation, all praised the legislation. Both FMI and NGA emphasized the importance of the grass-roots efforts on behalf of the interchange issue by retailers, and FMI cited Niemann's relationship with Durbin in particular as an important element of the legislation's passage.

“It started a real grass-roots thing,” said Niemann, who has discussed issues with Durbin for years, dating back to when the senator was a member of the House of Representatives representing his district in the 1980s and 1990s. “The message here is that you have to make that initial contact with your legislator. You have to get in front of them every so often. If you like something they do, you have to let them know, and if you don't like something, you have to let them know that as well.”

Niemann's efforts to maintain a strong relationship with Durbin illustrate how important it is for retailers to stay in touch with legislators on both sides of the aisle. In an age when political discussion is often described as being “divisive,” it is good to know that behind all the posturing, there are some genuine “connective” political discussions taking place as well.



Acceptable Use Policy
blog comments powered by Disqus

Subscribe / Renew to Supermarket News

Supermarket News

The most reliable source of industry news and insight...in print and online.


WH Refresh Blog

Bob Vosburgh Bob Vosburgh:

SN Editorial Videos

The Lempert Report

Marketing analysis, issues and trends from supermarket industry analyst Phil Lempert.

New Products Hits and Misses

Product reviews from supermarket industry analyst Phil Lempert.

The Role of Technology at Save Mart Supermarkets

Aashish Chandra, senior director of IT Save Mart, talks about his company's approach to technology.

SN Sponsored Videos

Pan-Oston Mobile Innovation Centers Tour

The Supermarket Guru shows the front-end technology you can experience during the tour.

View All

Articles by Market
Retail/Financial
Executive Changes
Grocery/Center Store/
Brands
Health & Wellness
In-Store Bakery/Deli/Meals
Logistics
Marketing
Meat/Seafood/Dairy
Nonfoods/Pharmacy/HBC
Produce/Floral
Specialty/Ethnic
Technology

Quick Poll

Key Issues & Topics
Food Safety/Recalls
Legislation/Regulations
Sustainability/Green
More Topics
Resources
Profiles & Rankings
SN Awards
SN Data
White Papers/Studies
Webinars
Trade Show Calendar
Subscribe to SN
Total Access Blog
WHRefresh Blog

Upcoming Events

View More Upcoming Events

Subscribe to SN

Subscribe to SN Newsletter

In-Depth News Stories

Latest SN Cover

Subscriptions

Get access to print and / or in-depth online conent.

Register Here

newsletter image

SN Free Daily Update

The food trade's leading daily news service.

Register Here

Retailers Temper Outlooks

The recession may be over but so too is the post-recession rebound.

More Real Estate Opportunities Open Up

For supermarkets looking for additional locations, it's a renter's market out there.

Stop & Shop, A&P in Ad Fracas

Price wars between supermarkets are tumbling off the shelves and into courtrooms.

Subscribe to SN's Content Today!

Subscribe to SN's Content Today!

Corporate Finance

Read in-depth coverage of quarterly reports.

Marketing Trends

New promotions, new pricing, new products.

Subscribe to SN's Content