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National Restaurant Association - Congressional hearing focuses on merchant debit-card fees

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Congressional hearing focuses on merchant debit-card fees

The NRA and its members are sending Congress loud-and-clear messages to support the timely and accurate implementation of a law passed last year to make merchant "swipe fees" for debit cards more reasonable.

The NRA today wrote to every member of the U.S. House Financial Services Committee, urging these key committee members to support full implementation of the Durbin Amendment, which Congress passed last summer as part of the financial-services reform bill. The amendment was approved by a 64-33 vote, with strong support from both Democrats and Republicans.

NRA members around the country are also sending messages to their lawmakers on the issue.

The Durbin Amendment authorized the Federal Reserve Board to publish regulations to ensure that the swipe fees merchants get charged when guests pay by debit card are reasonable and proportional to the cost of processing those transactions. The Federal Reserve issued proposed regulations in December. The proposal is due to be finalized by April 22 and go into effect by July 22.

The  House Financial Services panel's subcommittee on financial institutions and consumer credit holds a hearing on the issue Feb. 17, titled "Understanding the Federal Reserve's Proposed Rule on Interchange Fees: Implications and Consequences of the Durbin Amendment." 

Banks and card companies have mounted a costly advertising and lobbying campaign to slow or block implementation of the bipartisan reforms.

The NRA is represented at the Feb. 17 hearing as a leading member of the Merchants Payments Coalition, a broad coalition representing millions of businesses, from restaurants to florists and convenience stores. The NRA serves on the coalition's executive committee.

On the eve of the hearing NRA Executive Vice President for Policy and Government Affairs Scott DeFife asked the full committee for their support. The NRA "urges you to allow the Federal Reserve to continue the process of implementing the provision as directed under the law," he wrote.

The system of fees and contractual restrictions that Visa and Mastercard place on everyone who accepts their cards as payment isn't working, DeFife said.

"Many of these swipe fees and restrictions benefit the card networks and card-issuing banks at the expense of merchants  -- and ultimately, consumers," DeFife wrote. "Swipe fees on debit and credit card transactions, which amount to $48 billion annually, have been a growing expense for restaurants, and are the third highest cost for most establishments, usually following only labor and food expenses."

"This provision would modernize our financial payments system, provide relief to businesses who have seen their interchange fees skyrocket in recent years, and ultimately benefit consumers in the form of lower prices," he wrote. "We urge your support in allowing the Federal Reserve process to continue without delay."

Read the NRA's letter.

 

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