Merchants and consumers expressed outrage at the news that Representatives Chaffetz and Owens are planning to introduce legislation to repeal the common-sense swipe fee reforms that are just beginning to benefit merchants, consumers and small banks across the country.
Merchants, consumers and a bipartisan group of Members of Congress fought long and hard so that Main Street business owners and their customers could get relief from billions of dollars in hidden swipe fees.
“For Members of Congress today to do the bidding of the country’s biggest banks and attempt to repeal these reforms is an affront to merchants and their customers,” said Mallory Duncan, Chairman of the Merchants Payments Coalition and Senior Vice President and General Counsel of the National Retail Federation. “Repealing these reforms sends a message that anti-competitive, price-fixing behavior on the part of the country’s biggest banks is acceptable.”
As a result of the reforms and the small bank exemption, small banks and credit unions are utilizing the exemption and the two-tier interchange system to their advantage. Some are even paying consumers to open checking accounts and use debit cards. According to the National Association of Federal Credit Unions, traffic to its credit union locator site has increased more than 200% in the past week as customers have started looking for small banks that are effectively utilizing the new two-tier system. This is benefiting small banks and their customers.
“Earlier these lawmakers claimed they were trying to protect the interests of small banks and credit unions,” said Lyle Beckwith, Senior Vice President of Government Relations at the National Association of Convenience Stores. “Now that numerous stories prove that customers are fleeing high fee banks in favor of smaller institutions, it is clear that Congressmen Chaffetz and Owens are merely shilling for their too big to fail friends.”
Swipe fee reform went into effect on October 1. Though the Federal Reserve found that the average cost of a transaction was four cents, its final rule allowed the country’s largest banks to collect 24 cents for each debit transaction.