Main Street Businesses Welcome Bipartisan House Bill to Rein in Huge Credit Card “Swipe Fees”
One Day After Durbin-Bond Amendment Opens First Front on Swipe Fees in the Senate, Reps. Welch and Shuster Introduce Comprehensive Legislation in House
Washington, DC - Representatives of small businesses nationwide today applauded new bipartisan legislation in the House to rein in the huge, hidden “swipe fees” known as interchange, that big banks collect from small businesses every time a customer uses plastic to pay. The House legislation comes just one day after Senators Durbin (D-IL) and Bond (R-MO) announced a planned amendment to the Senate’s credit card legislation that would take a first step towards transparency and consumer discounts in the swipe fee system. Last year, banks raked in more than $48 billion in swipe fees, costing Americans more than credit card annual fees, cash advance fees, over-the-limit fees, and late fees combined.
The new House legislation is known as the Welch-Shuster Credit Card Interchange Fees Act of 2009 (HR 2382) and was introduced by Representative Peter Welch (D-VT-At Large) and Representative Bill Shuster (R-PA-09). The bill would bring transparency and competition to the swipe fee system, giving Main Street small businesses and their customers to a fair shake.
The Welch-Shuster legislation will require credit card companies to disclose their swipe fee rates, terms, and conditions. In addition, it will outlaw some of the most abusive rules that credit card companies use to make sure they can keep raising their fees without any running into competitive pressures to reduce them. And the bill will empower the Federal Trade Commission to review these rules and prohibit any practices that are found to be anticompetitive or unfair or deceptive to consumers.
Additional original co-sponsors of the bipartisan legislation are: Rep. John Barrow (D-GA-12), Rep. Christopher Carney (D-PA-10), Rep. Keith Ellison (D-MN-05), Rep. Steve Kagen (D-WI-08), Rep. Zoe Lofgren (D-CA-16), and Rep. Todd Russell Platts.
“We applaud Congressmen Welch and Shuster and welcome the much-needed relief this legislation would bring to small business owners and their customers nationwide,” said Lyle Beckwith, Senior Vice President of the National Association of Convenience Stores. “Credit card swipe fees are one of the largest expenses small businesses face and these huge, hidden fees hurt small businesses and consumers at the very time we’re relying on them to rebuild our economy.”
Currently, swipe fees are set in secret by the credit card companies, and business owners have no ability to negotiate it or even tell their customers what they’re being charged. The amount banks rake in from swipe fees has tripled since 2001, even as the cost of processing credit cards has dropped dramatically.
American consumers pay the highest interchange fees in the industrialized world. Many other countries around the world have reined in this abuse - even though they already had lower fees than ours - and it’s time for our leaders to act. With this new bill, Congressmen Welch and Shuster are standing up for America’s consumers and small businesses.