RILA Applauds Congressional Hearing on Interchange Fee Reform 

The Retail Industry Leaders Association (RILA) applauded today’s Congressional hearing on interchange-fee reform and called on Congress to pass legislation to protect retailers, small and large, from unfair fee increases imposed by credit card companies.

The hearing, held before the House Financial Services Committee, considers HR 2382, the Credit Card Interchange Fees Act of 2009, introduced by Congressman Peter Welch (D-VT).

“We thank Chairman Frank and Ranking Member Bachus for holding today’s hearing and welcome the committee’s consideration of reasonable legislation to reform these unfair fees, which cost merchants and consumers billions each year,” said John Emling, senior vice president for government affairs.
 
Interchange fees are imposed by credit card companies and issuing banks under the pretense of processing credit and debit card transactions.  However, these fees have tripled in the United States since 2001, to $48 billion in 2008, despite advances in technology that have reduced other comparable transactional costs.  Today, for most retailers, the cost of processing paper checks is less than the cost of accepting credit and debit cards.

“Because of their overwhelming market share, Visa, MasterCard and their issuing banks operate with impunity and without fear of losing customers to competitors. Why? Because they have none. Without real competition in the credit card market or transparency in rate setting, fees will continue to rise, indiscriminately hurting the merchants and consumers who bear the cost,” said Emling.

Interchange fees are particularly harmful to small businesses, which often face higher rates than larger businesses.

“Congress must act to reform this broken system and prevent credit card giants and their issuing banks from continuing to impose unjustifiable fees on retailers small and large,” added Emling.   “RILA is proud to stand alongside the small business and franchise owners who, like large retailers, are powerless to negotiate these outrageous fees.” 

Last week, a petition signed by 1.7 million consumers demanding interchange fee reform, was delivered to Congress.  The signatures were collected by 6,300 franchise owners of 7-Eleven; a RILA member company.

RILA is the trade association of the world’s largest and most innovative retail companies. RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs and operate more than 100,000 stores, manufacturing facilities and distribution centers domestically and abroad.

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