Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

Washington
Business group leader questions merchants interchange arguments
WASHINGTON (5/4/10)—The president and chief executive of the Black Chamber of Commerce, writing to The New York Times, questioned why anyone would side with “giant retailers” on the issue of government controls on interchange fees. In his letter in the Sunday, May 3 issue, Harry C. Alford said those retailers are simply asking the U.S. Congress “to exempt them from antitrust laws so they can avoid paying market price for the use of credit card transactions.” He added, “The real truth: while everyone loves to grandstand when it comes to the credit card industry, its vast central nervous system drives much of today’s economy, allowing for efficient noncash transactions, better safety and recordkeeping, and convenience for consumers and retailers alike. The ‘interchange fee’ charged to retailers helps finance this global system.” Many retailers back legislation that would allow the government to limit the fees—known as interchange fees--that card issuers charge card processors for the ability to accept and process debit and credit card transactions. But Alford dismissed their claims that the "hidden" interchange fee system deprives customers of potential savings and cited a recent Government Accountability Office (GAO) report, which found, Alford noted, “that if giant retailers like Costco and Target are successful with this campaign, consumers could be hurt.” “Families would pay an estimated $400 a year that would otherwise be paid by the retailers. The retailers even opposed a (c)ongressional proposal that would ensure consumer benefit from any reduction in interchange fees,” Alford’s letter to the editor said. He was responding to an April 21 letter in support of the merchants’ position. Alford further pointed out that the GAO “found that retailers likely pocketed the $1 billion in ‘savings’ in Australia” when that government mandated lower interchange fees. The Credit Union National Association (CUNA), and other members of the Electronic Payment Coalition, have spoken in favor of the current interchange fee structure, saying that regulating interchange fees would adversely affect consumers, competition, and technological innovation. CUNA also has highlighted the positive aspects of interchange fees, saying that the fees help credit unions cover their expenses and losses while offering merchants a guaranteed source of payment at the time that the transaction is completed. CUNA continues its grassroots call to action urging credit unions to contact federal lawmakers to oppose efforts to change the interchange fee structure. As debate begins again this week on financial regulatory reform in the Senate, it is expected there will be amendments offered to address interchange issues. Also, in recent years there have been about a dozen merchant-backed interchange bills launched at the state level, but none of them have been enacted into law. Use the resource link below for resources on interchange.


RSS print
News Now LiveWire
For the last 75 years, even in the most difficult of times, Mill Town #CU has been there for the community it serves. Read #NewsNow Tues.
4 hours ago
The 1st vid shows how consumer can become victim and, advice to those who think they've been targeted. http://t.co/hr9VHpzEze
8 hours ago
.@TheNCUA has released two videos designed to raise awareness of elder financial abuse. http://t.co/iddSxr7H40
8 hours ago
Celebrate #100MM with @MDDCCUA1 at Orioles v Blue Jays tonight at Camden Yards
8 hours ago
The At Home In Lawrence mortgage program from @MetroCU is designed to help revitalize Lawrence, Mass.
9 hours ago