Retail Industry Applauds Introduction of Credit Card Fair Fee Act 

Today the Retail Industry Leaders Association (RILA) applauded the introduction of legislation that will address hidden and rising interchange fees charged to merchants and consumers by debit and credit card issuers for the processing of transactions. These hidden charges raise the cost of all goods purchased by Americans and cost consumers $48 billion in fees in 2008. 

S. 1212, The Credit Card Fair Fee Act, introduced by Senate Majority Whip Richard Durbin (D-IL), comes on the heels of similar legislation (H.R. 2695, The Credit Card Fair Fee Act) that was introduced in the House last week by Judiciary Committee Chairman John Conyers (D-MI) and Representative Bill Shuster (R-PA). 

“The time for action on interchange fees is now, as exemplified by consumer demand for greater transparency and reform of our economy,” said John Emling, senior vice president of government affairs. “We are thankful that Majority Whip Durbin, Chairman Conyers and Congressman Shuster are committed to bringing transparency and competition to interchange rates.”

Currently MasterCard and Visa dominate the U.S. market with over an 80 percent market share and thus have no incentive to negotiate interchange fees – even with the largest retailers in the world. The Credit Card Fair Fee Act will even the playing field and allow merchants a seat at the table in the determination of credit card fees and terms and the ability to negotiate lower interchange rates with card companies and issuing banks.

“This legislation is not an attempt at regulating the industry or boosting retail profits. It simply enhances competition by allowing merchants to negotiate with dominant banks for the terms and rates of fees. Retailers operate within very slim profit margins and do so purposely to ensure that the cost savings will be passed along to consumers in the form of lower costs and better services,” Emling continued.  

Data compiled by the Kansas City Federal Reserve Bank shows that interchange rates in the United States are nearly four times as high as those in the European Union, putting our businesses at an economic disadvantage and costing American consumers that much more in the form of hidden fees.

“Quiet price-fixing breeches anti-trust laws hindering free market competition and harming the consumer. This kind of conduct is especially unwarranted in a time when merchants and consumers are already feeling financially pinched,” Emling added.

RILA promotes consumer choice and economic freedom through public policy and industry operational excellence. Its members include the largest and fastest growing companies in the retail industry -- retailers, product manufacturers and service suppliers -- which together account for more than $1.5 trillion in annual sales. RILA members provide millions of jobs and operate more than 100,000 stores, manufacturing facilities and distribution centers domestically and abroad.

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