NGA disappointed on House Financial Services Committee bill that repeals debit card swipe fee reform

ARLINGTON, VA, 2016-Sep-14 — /EPR Retail News/ — The National Grocers Association (NGA) today (Sep 13, 2016) issued the following statement in response to a House Financial Services Committee markup of the Financial CHOICE Act of 2016 (H.R. 5983), a bill that repeals debit card swipe fee reform, also known as the Durbin Amendment that was passed in the 2010 as a part of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

NGA Senior Vice President of Government Relations and Public Affairs Greg Ferrara said: “Since its passage six years ago, the Durbin Amendment has brought competition and transparency into a payment system that has historically been void of it. Repealing these reforms would have negative impacts on the independent supermarket industry and the consumers it serves. We need to ensure more competition within the debit market – not remove it.”

“NGA is disappointed to see members of the House Financial Services Committee side with Wall Street banks over Main Street grocers and merchants.  Repeal of these important reforms is simply another gift to the nation’s biggest banks and card networks.  NGA and our members are committed to defeating this legislation so long as it continues to include repeal of the Durbin reforms.”

Yesterday, NGA sent a key vote letter to members of the House Financial Services Committee urging them to oppose the CHOICE Act. Click HERE to view the letter.

Contact:

(703) 516-0700
Fax (703) 516-0115

Source: National Grocers Association

RILA: Repealing debit swipe fee reforms would once again allow the largest banks and card networks to impose outrageous fees on merchants

Arlington , VA, 2016-Sep-09 — /EPR Retail News/ — The Retail Industry Leaders Association (RILA) is urging members of the U.S. House of Representatives Financial Services Committee to vote no when the CHOICE Act comes up for a vote next week. The bill repeals reforms passed more than six years ago that brought fairness and competition to the debit card market.

Swipe fee reform, also known as the Durbin Amendment, passed the Senate in 2010 with 64 votes. The reforms require that the fees that banks and card networks charge every time a debit card is swiped are “reasonable and proportionate to the cost of processing the transaction.” Prior to the passage of reforms, card networks utilized their overwhelming market power to raise fees at will. Swipe fees are estimated to cost merchants and consumers $50 billion every year.

“Repealing debit swipe fee reforms would once again allow the largest banks and card networks to impose outrageous fees on merchants across the country, while hurting everyone outside Wall Street,” said Jennifer Safavian, RILA’s executive vice president for government affairs. “Make no mistake, the CHOICE Act’s central objective is to turn back the clock on reforms that brought fairness and competition to the broken debit card market. We urge members to recognize the importance of competition in the payments ecosystem and to oppose the CHOICE Act.”

Numerous RILA member companies were among the more than 400 companies that wrote House Financial Services Committee Chairman Jeb Hensarling and Subcommittee Chairman Randy Neugebauer (R-TX) this week urging that they withdraw their respective proposals to repeal debit swipe reform.

Swipe Reform Facts:

Banks Collected Most Debit Swipe Fees Ever in 2015
“A new study shows that the Durbin Amendment has yet to put a big dent into FIs’ total debit interchange revenue, with banks and credit unions amassing $18 billion in [debit] interchange in 2015—the highest total ever.”

Small Banks are Among Swipe Fee Reforms Biggest Winners
“There is substantial evidence that the ceiling did lower interchange fees collected by banks with assets above $10 billion, from around 44 cents to about 22 cents per transaction. But there was no such decline for small banks. Furthermore, after the ceiling was imposed, the volume of transactions conducted with cards issued by exempt banks grew faster than it did for large banks. Finally, Zhu Wang shows that interchange revenue fell substantially at large banks after the fee ceiling was imposed but continued rising for small banks.”

Swipe fee Reform Saves Consumers Billions and Creates Jobs
When debit swipe reform went into effect in October 2011, the average debit swipe fee on cards from covered banks dropped from 48 cents to 24 cents per transaction, saving consumers $5.8 billion in lower costs for good and services and saving merchant businesses $2.6 billion in 2012. The savings in turn supported 37,501 new jobs.

Free Checking Grows
According to the American Bankers Association (ABA), more Americans have free checking today than they did before the Durbin Amendment passed. In 2010, the ABA reported that 53% of consumers had free checking compared to 61% last year.

RILA is the trade association of the world’s largest and most innovative retail companies. RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs and more than 100,000 stores, manufacturing facilities and distribution centers domestically and abroad.

Contact:

Brian Dodge
Executive Vice President, Communications and Strategic Initiatives
Phone: 703-600-2017
Email: brian.dodge@rila.org

Source: RILA