An amendment to pending legislation in the Senate aims to help ensure that the interchange fees retailers pay to allow customers to use debit cards are fair, according to the National Association of Chain Drug Stores.
The amendment to the Restoring American Financial Stability Act of 2010 seeks to make sure that the "swipe fees" retailers are charged for accepting debit cards are "reasonable and proportional" to the costs incurred by card issuers.
ALEXANDRIA, Va. — An amendment to pending legislation in the Senate aims to help ensure that the interchange fees retailers pay to allow customers to use debit cards are fair, according to the National Association of Chain Drug Stores.
NACDS said Monday that in a bipartisan 64-33 vote, the Senate approved Senate Amendment 3932, submitted by Senate Majority Whip Richard Durbin (D., Ill.). The Durbin amendment to S. 3217, the Restoring American Financial Stability Act of 2010, seeks to make sure that interchange "swipe fees" that small businesses and retailers are charged for accepting debit cards are "reasonable and proportional" to the costs incurred by financial institutions such as banks and credit unions.
"On behalf of the NACDS retail members, I want to thank the amendment’s co-sponsors, Sens. Durbin, Sanders, Cardin and Specter, for leveling the economic playing field for merchants and consumers," Steve Anderson, NACDS president and chief executive officer, said in a statement. "This has been a top priority for the retail community for some time, and the Senate’s action is a positive step forward for fairness for consumers and retailers alike."
NACDS — whose members include chain drug stores as well as supermarket chains and other mass retailers — noted in a letter to lawmakers that interchange fees have escalated at a time when businesses are trying to spur growth and consumers are sensitive to price hikes.
"Unless relief is granted, interchange ‘swipe fees,’ which amounted to $48 billion in 2008, will continue to rise as card companies and issuing banks seek even higher profits, primarily on the backs of our organizations’ members," NACDS wrote in the letter, sent in the middle of last week. "This comes at a time when businesses, state agencies and charities — all of whom pay interchange fees — are struggling to help the economy grow again and when consumers can least afford pricing increases.
"Despite Congress’ efforts to reign in abusive practices, credit card companies continue to take advantage of a major loophole in financial regulation. In fact, they announced interchange rate increases just months after the passage of the Credit Card Accountability, Responsibility and Disclosure Act of 2009, effectively circumventing many of the reforms
instituted by Congress," the association pointed out in the letter.
The Durbin amendment would give retailers the option of offering customer discounts and consumer incentives for those who pay in cash or other debit/credit means, as well as task the Federal Reserve with enhanced regulatory powers over some interchange swipe fees, according to NACDS.
At presstime, the amended American Financial Stability Act of 2010 had yet to be approved by the Senate, and the bill still needs to pass the House of Representatives in identical form before it can be presented to President Obama to be signed into law.