Latest Hearing on Interchange Fees ‘Important Next Step,’ Says FMI
Last Thursday’s hearing on the Credit Card Fair Fee Act of 2008 by the House Judiciary Committee Task Force on Competition Policy and Antitrust Laws was an important step for retailers and trade groups who have been vocal about the unfairness of credit card company practices, FMI’s senior director of government relations Jennifer Hatcher told Progressive Grocer on Friday.
“It was really the next step in the legislation process,” she said. “We were very pleased with how it turned out – with the questions that were asked and the number of members of Congress there who asked thoughtful questions.”
The issue “continues to be very bipartisan,” which is a great advantage to getting bills passed in today’s political environment, Hatcher added. Thirty-three co-sponsors have joined House Judiciary Committee Chairman John Conyers (D-MI), including 18 Democrats and 15 Republications, she noted.
This achievement is due in part to the efforts of members of FMI, who have spent lot of time educating members of Congress, she said. “There wasn’t a person in the room [at the hearing] who didn’t think there’s a problem. That’s a big step -- an important step -- that shows that our educational efforts are paying off.”
Stephen Cannon, an expert antitrust attorney, testified on behalf of FMI and the Merchants Payments Coalition. Other presenters included Edmund Mierzwinski at U.S. PIRG (Public Interest Research Group), who brought a “strong testimony” against interchange fees on behalf of U.S. consumers, according to Hatcher. Tom Robinson, president of Robinson Oil Corp., represented the National Association of Convenience Stores.
MasterCard and Visa also sent general council who testified for the first time on the House side, Hatcher said.
As for the next steps, Hatcher said she expects a bill to be introduced in the Senate in the near future. “Whether we’ll move to a mark-up situation in the House or to an introduction in the Senate first isn’t clear. But we do want to move toward mark-up, and we want to continue the process on the Senate side as well. We absolutely expect that that kind of momentum to continue, and we’re certain we’ll see additional action this year,” she said.
The purpose of the Credit Card Fair Fee Act of 2008 (H.R. 5546), which was introduced earlier this year, is to “provide merchants a seat at the table, to allow us to get together and talk to [the credit card companies], and have legitimate negotiation just like any other product we offer in the store or any other aspect of running a business,” Hatcher noted. “Our members continue to say this is the one line item on their budget sheet they can’t negotiate. It makes no sense.”
The introduction of the legislation follows three congressional hearings on interchange fee issues, including one on July 19, 2007, by the House Judiciary Committee Antitrust Task Force and two in 2006 by the full Senate Judiciary Committee on July 19 and by the House Commerce Subcommittee on Commerce, Trade and Consumer Protection on February 15. The U.S. Justice Department revealed at the 2007 hearing that it is investigating interchange fee antitrust issues.
The cost of the largest transaction fee, interchange, has tripled since the beginning of this decade, from $16.6 billion in 2001 to a projected $48.8 billion this year, according to the Merchants Payments Coalition and data from The Nilson Report.
Credit card companies extract an interchange fee averaging about 2 percent on every credit card transaction, FMI said.
“It was really the next step in the legislation process,” she said. “We were very pleased with how it turned out – with the questions that were asked and the number of members of Congress there who asked thoughtful questions.”
The issue “continues to be very bipartisan,” which is a great advantage to getting bills passed in today’s political environment, Hatcher added. Thirty-three co-sponsors have joined House Judiciary Committee Chairman John Conyers (D-MI), including 18 Democrats and 15 Republications, she noted.
This achievement is due in part to the efforts of members of FMI, who have spent lot of time educating members of Congress, she said. “There wasn’t a person in the room [at the hearing] who didn’t think there’s a problem. That’s a big step -- an important step -- that shows that our educational efforts are paying off.”
Stephen Cannon, an expert antitrust attorney, testified on behalf of FMI and the Merchants Payments Coalition. Other presenters included Edmund Mierzwinski at U.S. PIRG (Public Interest Research Group), who brought a “strong testimony” against interchange fees on behalf of U.S. consumers, according to Hatcher. Tom Robinson, president of Robinson Oil Corp., represented the National Association of Convenience Stores.
MasterCard and Visa also sent general council who testified for the first time on the House side, Hatcher said.
As for the next steps, Hatcher said she expects a bill to be introduced in the Senate in the near future. “Whether we’ll move to a mark-up situation in the House or to an introduction in the Senate first isn’t clear. But we do want to move toward mark-up, and we want to continue the process on the Senate side as well. We absolutely expect that that kind of momentum to continue, and we’re certain we’ll see additional action this year,” she said.
The purpose of the Credit Card Fair Fee Act of 2008 (H.R. 5546), which was introduced earlier this year, is to “provide merchants a seat at the table, to allow us to get together and talk to [the credit card companies], and have legitimate negotiation just like any other product we offer in the store or any other aspect of running a business,” Hatcher noted. “Our members continue to say this is the one line item on their budget sheet they can’t negotiate. It makes no sense.”
The introduction of the legislation follows three congressional hearings on interchange fee issues, including one on July 19, 2007, by the House Judiciary Committee Antitrust Task Force and two in 2006 by the full Senate Judiciary Committee on July 19 and by the House Commerce Subcommittee on Commerce, Trade and Consumer Protection on February 15. The U.S. Justice Department revealed at the 2007 hearing that it is investigating interchange fee antitrust issues.
The cost of the largest transaction fee, interchange, has tripled since the beginning of this decade, from $16.6 billion in 2001 to a projected $48.8 billion this year, according to the Merchants Payments Coalition and data from The Nilson Report.
Credit card companies extract an interchange fee averaging about 2 percent on every credit card transaction, FMI said.