By Rep. Terry England
House Appropriations Chair
Last year Sen. Saxby Chambliss and Sen. Johnny Isakson worked to include a very important provision in the federal financial reform legislation that should be very beneficial to small businesses – I know it will be to mine. The provision that I am talking about is one that seeks to keep the big banks and credit card processors in line by restructuring the way that interchange (card swipe) fees are determined.
While I do not agree with a great deal of the bigger package, I am very grateful they were able to add something to bring the sometimes seemingly out-of-control fees and extra charges back to a reasonable place – and to give the small business owner a little leverage in negotiating with the big financial institutions. I am grateful that the senators have tried to stand up for companies like mine instead of doing what the Wall Streets folks wanted.
It is frustrating - and infuriating – to be forced into doing business with financial institutions so large that they do not seem to care what their fees and charges do to the small business owner. The American taxpayers were already put on the hook for the billions to bail out these financial wizards because they were “too big to fail.” It seems like they have taken that bailout as their “just due” and proceed to do business as normal, trying to squeeze every cent they can from small business owners through tacking on every possible fee to any all and all transactions and accounts they touch.
As a small business, we do not have a team of lawyers and accountants to figure out the layers and layers of fees the credit card firms charge us. For example, there is one price if you use the automated machines to swipe a debit or credit card; there is a higher fee if the machine cannot read the magnetic strip and we have to type in the numbers manually; and yet an even higher rate if we have call in to verify the card personally.
I have no real ability as in independent retailer to negotiate with these near-monopolies. The strength of bargaining has been taken away as the processors continue to hold more and more leverage over the small business owners. I can, however, negotiate with my customers and attract new business if I can reduce the cost to me (and them) with lower processing costs.
Saxby and Johnny understood these problems and challenges. They agree that my small company of 11 employees represents the backbone of business in America. We thank them for their efforts and support.”
Rep. Terry England, R-Auburn, is chair of the House Appropriations Committee.