WASHINGTON (6/9/08)—The Credit Union National Association (CUNA) opposes a recently introduced Senate bill to regulate credit card interchange fees and believes the free market, not the government, should set the user fees. Sen. Richard Durbin (D-Ill.), who is majority whip, introduced a bill last week that would force payment system providers and merchants to either agree on interchange fees or argue their case before a newly created tribunal which would have the authority to set the rate. His bill, a companion to similar House legislation, would set up a three-member panel of lawyers appointed by the U.S. Department of Justice and the Federal Trade Commission. Under Durbin's Credit Card Fair Fee Act of 2008, retailers would be able to engage in collective negotiations with the providers of any electronic payment system with significant market power, defined as 20% or more of the credit and debit card market, over the fees and terms for access to that system. If the retailers and providers do not reach a voluntary agreement on fees and terms, the matter would be brought before the three-judge board. The House bill (H.R. 5546), introduced by Rep. John Conyers (D-Mich.) who is chairman of the powerful Judiciary Committee, was drafted after Conyers conducted a series of House task force meetings focused on whether credit card companies, as well as financial institutions, engage in anti-competitive practices when setting the fees they charge retailers. CUNA Vice President of Legislative Affairs Ryan Donovan Friday said CUNA strongly opposes government intervention in what should be a free-market process and has been working closely with the Electronic Payments Coalition to oppose legislative efforts in the House and Senate. Donovan said the current system of setting interchange fees is beneficial to consumers because interchange fees assist the growth of universal acceptance of cards and the innovation of super-fast authorization technology and enhanced security measures.