Interchange bill may be dead for '08

WASHINGTON (7/17/08)—A bill that would give merchants an antitrust exemption to negotiate interchange fees narrowly squeaked by the House Judiciary Committee Wednesday with a 19-16 vote.

The committee approved a number of changes to the original bill as it marked up the Credit Card Fair Fee Act (H.R. 5546). The Credit Union National Association (CUNA) opposes government intervention in setting interchange fees. CUNA believes that the tight vote and a short remaining legislative calendar will combine to preclude a final vote on an interchange bill this year.

CUNA President/CEO Dan Mica stated, "The close, 19-16 vote in the Judiciary Committee today for the Interchange Fee bill indicates that this measure may have run its course, at least for this Congress.

"With such little time left for congressional action, and with other key measures waiting their turn, the bipartisan opposition – split 50-50 – to the bill makes it difficult to imagine such controversial legislation can precede much, if at all, further in the House for this Congress."

As approved, the bill would provide that credit unions regulated by the National Credit Union Administration (NCUA) and other financial institutions with under $1 billion in assets may "opt out" of interchange negotiations. The opt-out was added as an amendment offered by the committee chairman, Rep. John Conyers (D-Mich.)

However, CUNA remains concerned that the opt-out option does not address credit unions' underlying concerns with the legislation.

Mica said, "As for the 'opt-out' provision for credit unions, we appreciate Chairman Conyers' efforts to address credit union concerns with the bill. He was clearly listening to the significant concerns expressed loudly by credit unions.

"However, we also believe that the so-called 'opt out' has some very practical shortcomings that make it, essentially, unworkable for credit unions."

Mica added that CUNA does not assume HR 5546 is dead, and will remain active on the Hill in "beating the legislative drums against floor consideration and passage.'

"HR 5546 is not necessary for credit unions and will work against consumers in the long run. We will continue to oppose it," Mica added.

The bill underwent other transformations during the mark-up session. The committee:

• Jettisoned a provision in the original bill that would have established a three-member panel of lawyers appointed by the U.S. Department of Justice and the Federal Trade Commission (FTC) to settle fee disputes between merchants and card providers; and

• Adopted a provision that prohibit the use of an unlawful boycott by merchants under the antitrust exemption.

Resource Links

CUNA Summary of Interchange Issues