NRF calls on the House Financial Services Committee to reject efforts to repeal debit card swipe fee reform

WASHINGTON, 2017-May-03 — /EPR Retail News/ — The National Retail Federation today (May 2, 2017) called on the House Financial Services Committee to reject efforts to repeal debit card swipe fee reform as it considers approval of the Financial Choice Act.

“Debit card swipe fee reform has brought competition and transparency to the debit card payments market,” NRF Senior Vice President for Government Relations David French said. “Repealing reform would only undermine transparency and competition, further lining banks’ pockets.”

“Swipe fees are a major concern, especially for small retailers,” French said. “If debit swipe fee reform is repealed, costs to retailers will only increase, meaning higher prices for consumers and less opportunity for retailers to grow their businesses, provide jobs and support community efforts. Rather than repeal a successful provision of law that has brought competition into the payments market, we encourage Congress to support the future of payments and make sure competition is protected.”

French’s comments came in a letter to the committee, which began debate this morning on the Financial Choice Act, legislation sponsored by Chairman Jeb Hensarling, R-Texas, that would repeal debit swipe fee reform as part of a larger rollback of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Committee approval of the bill could come today or Wednesday, with a vote by the full House expected later this month.

The committee is moving forward today even though only a single hearing has been held on the nearly 600-page bill. No retailers were allowed to testify at last week’s hearing despite the impact of the swipe fee issue on the industry. Nonetheless, dozens of retailers held more than 100 meetings on the issue with lawmakers on Capitol Hill the same day. NRF submitted a statement for the record and is running digital ads and has delivered more than 7,000 email petitions addressing consumer benefits and competition that urge Congress to preserve debit card reform.

Debit reform was enacted as part of Dodd-Frank in response to the card industry’s practice of price-fixing the debit card “swipe” fees banks charge merchants to process transactions. The fees previously averaged 1-2 percent of the purchase amount, and virtually all banks that issue cards charged the same.

Under reform regulations that took effect in October 2011, large banks are limited to 22 cents per transaction, down from about 45 cents in the past. The limit saved retailers about $8.5 billion in the first year alone, with close to $6 billion of the savings passed along to consumers, according to a study by economist Robert Shapiro. Banks that set the fees competitively and independently are exempt from the limit, but virtually none have done so. Banks with under $10 billion in assets are also exempt.

Reform also required that merchants be given at least two choices in the networks that route debit transactions to the bank for processing, typically one controlled by Visa or MasterCard and a competing, independent network that offers advantages such as lower fees, better service or better security.

NRF is the world’s largest retail trade association, representing discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, chain restaurants and Internet retailers from the United States and more than 45 countries. Retail is the nation’s largest private sector employer, supporting one in four U.S. jobs – 42 million working Americans. Contributing $2.6 trillion to annual GDP, retail is a daily barometer for the nation’s economy. NRF.com

Contact:
J. Craig Shearman
(202) 626-8134
press@nrf.com
(855) NRF-Press

Source: NRF

Retailers Urge Congress To Help Save Consumers Billions With Swipe Fee Reform

WASHINGTON, 2017-Apr-29 — /EPR Retail News/ — The National Retail Federation and retailers from across the country went to Capitol Hill today (April 26, 2017) as Congress held a hearing on legislation that would repeal debit card swipe fee reform, telling lawmakers that reform has saved merchants and consumers more than $40 billion and should be protected.

“Debit card reform has been a remarkable success,” NRF Senior Vice President and General Counsel Mallory Duncan said. “It has saved retailers and their customers billions of dollars and it has brought the beginnings of transparency and competition to a market where swipe fees were price-fixed and all banks linked arms to charge the same high fees. If reform is repealed, the big banks will go back to those practices, and nothing will stop them from setting these fees as high as they like and driving up prices paid by consumers in the process.”

“This has been settled law for the better part of a decade,” Duncan said. “We should be looking at the future of payments rather than trying to re-legislate this important consumer protection and vital step forward for fair market competition.”

The House Financial Services Committee is holding a hearing this morning on the Financial Choice Act, legislation sponsored by Chairman Jeb Hensarling, R-Texas, that would repeal debit swipe fee reform as part of a larger rollback of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

No retailers were invited to testify at the hearing despite the issue’s impact on the industry. But dozens of retailers are in Washington today for a fly-in organized by NRF and other retail groups to lobby against repeal and many attended the session. In addition, NRF submitted a statement for the record and is running digital ads and circulating petitions addressing consumer benefits, competition and retailers’ concerns that urge Congress to preserve debit card reform.

This morning, Senate Minority Whip Richard Durbin, D-Ill., the namesake sponsor of debit swipe fee reform in the Senate, and Representative Peter Welch, D-Vt., the measure’s chief backer in the House, spoke before retailers over breakfast.

Debit reform was enacted as part of Dodd-Frank in response to the card industry’s practice of price-fixing the debit card “swipe” fees banks charge merchants to process transactions. The fees previously averaged 1-2 percent of the purchase amount, and virtually all banks that issue cards charged the same.

Under reform regulations that took effect in October 2011, large banks are limited to 22 cents per transaction, down from about 45 cents in the past. The limit saved retailers about $8.5 billion in the first year alone, with close to $6 billion of the savings passed along to consumers, according to a study by economist Robert Shapiro. Banks that set the fees competitively and independently are exempt from the limit, but virtually none have done so. Banks with under $10 billion in assets are also exempt.

The savings has been particularly important to small retailers, who say the fees are among their highest expenses.

A survey conducted for NRF last year found that 89 percent of consumers said the limit should remain in place. In addition, 84 percent said swipe fees should be set on a competitive basis rather than letting card companies set price-fixed fees.

NRF is the world’s largest retail trade association, representing discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, chain restaurants and Internet retailers from the United States and more than 45 countries. Retail is the nation’s largest private sector employer, supporting one in four U.S. jobs – 42 million working Americans. Contributing $2.6 trillion to annual GDP, retail is a daily barometer for the nation’s economy. NRF.com

Contact:
J. Craig Shearman
(202) 626-8134
press@nrf.com
(855) NRF-Press

Source: NRF

Food Marketing Institute strongly opposes House Financial Services Committee provision on ‘No-Choice’ act

ARLINGTON, VA, 2016-Sep-15 — /EPR Retail News/ — Food Marketing Institute (FMI) strongly opposes the provision in House Financial Services Committee Chairman Jeb Hensarling’s (R-TX) so-called “CHOICE” Act (H.R. 5983), which eliminates choice for Main Street businesses and repeals debit card reforms that have fostered  competition in the marketplace for the past five years.

In 2010, Congress took the first step to address the broken payment card market by including debit reforms in the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. This Act required debit networks to actually compete for both bank and merchant routing business, breaking up monopolies.

“H.R. 5983 would be more appropriately named the ‘No-Choice’ act as it eliminates competition in the debit routing market and essentially ensures a return to a monopoly for one player,”  said Jennifer Hatcher, chief public policy officer & senior vice president, government relations. “I urge members of Congress and the House Financial Services Committee to stand with Main Street businesses in support of a competitive marketplace and oppose Chairman Hensarling’s legislation. Congress should not waste time attempting to repeal a successful competition-promoting reform when it has an extremely long to-do list of important items awaiting action.”

The 2010 debit reforms finally brought stability, transparency and even competition into the debit routing market.  Repealing the successful debit reforms would remove competition and increase merchants’ operating costs; with a 1.5% industry profit margin, any increases will have a direct impact on prices for consumers. The largest card networks should compete with each other and regional players to bring the best value and efficiency to customers, just like Main Street retailers do every day.

Food Marketing Institute proudly advocates on behalf of the food retail industry. FMI’s U.S. members operate nearly 40,000 retail food stores and 25,000 pharmacies, representing a combined annual sales volume of almost $770 billion. Through programs in public affairs, food safety, research, education and industry relations, FMI offers resources and provides valuable benefits to more than 1,225 food retail and wholesale member companies in the United States and around the world. FMI membership covers the spectrum of diverse venues where food is sold, including single owner grocery stores, large multi-store supermarket chains and mixed retail stores. For more information, visit www.fmi.org and for information regarding the FMI foundation, visit www.fmifoundation.org.

Contact:

Tel: 202-452-8444
Fax: 202-429-4519

Source: Food Marketing Institute

RILA objects House Committee vote on Financial CHOICE Act

Arlington , VA, 2016-Sep-14 — /EPR Retail News/ — In a letter sent to House Financial Services Committee Chairman Jeb Hensarling and Ranking Member Maxine Waters, the Retail Industry Leaders Association (RILA) outlined retailers’ objections to H.R. 5983, the Financial CHOICE Act, and urged the Committee to vote against the legislation this week.

The CHOICE Act, specifically Section 335, repeals important debit 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. 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.

According to the letter, “repealing these reforms would remove competition and transparency from the marketplace and provide banks the ability to drastically raise fees – ultimately hurting businesses of all sizes.”

“The Durbin Amendment quite simply brought fairness and competition to a market that previously had none. Repealing the amendment would be turning the clock back on commonsense bipartisan reforms,” said Jennifer Safavian, RILA’s executive vice president for government affairs. “We urge the Committee to take into consideration the harmful consequences of this legislation as they take a vote this week.”

In addition to urging committee members to vote against this harmful legislation, RILA’s letter disputes many false claims made by the banking community about the Durbin Amendment. Despite their claims, the reform has not resulted in consumers’ loss of free checking, nor has it disproportionately harmed smaller banks.

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) last week urging that they withdraw their respective proposals to repeal debit swipe reform.

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: Retail Industry Leaders Association

NRF urges Congress to reject bill that would both undermine competition and repeal on debit card swipe fees

WASHINGTON, 2016-Sep-14 — /EPR Retail News/ — The National Retail Federation today (September 13, 2016) asked Congress to reject legislation that would both undermine competition and repeal the Federal Reserve’s cap on debit card swipe fees. The proposed bill would unleash new, higher, hidden swipe fees that could more than double without competitive routing options and the cap that are currently in place. Most consumers want the billions of dollars in savings to remain.

“Billions of dollars that retailers have saved under this cap have been passed on to their customers, and the vast majority of consumers surveyed have made it clear that they want those savings to continue,” NRF Senior Vice President and General Counsel Mallory Duncan said. “Repealing this important consumer protection measure would drive up the price of almost everything consumers buy and create an unearned windfall for the nation’s largest banks. Big banks can’t be allowed to take yet another bite out of the consumer spending that drives the nation’s economy.”

The Dodd Frank Law set limits on what big banks could charge if they chose not to compete. Repealing the law would allow banks to raise the fees as high as they want, without fear of competition.  “Swipe fee reform pulled banks’ hand at least part of the way out of consumers’ pockets,” Duncan said. “We can’t let them put it back in again.”

Prior to reform, competition was also being undermined because the banks and their card companies locked processing competitors out of the marketplace. Debit card swipe fee reform reversed that, and as a result, there is now an opening for debit networks who are faster, cheaper, more innovative and certainly safer; for example, they all use PINs. Repeal of these reforms will undo this progress and will drive swipe fees up even higher.

A survey conducted for NRF this summer found that 89 percent of consumers said the reform should remain in place. In addition, 84 percent said swipe fees should be set on a competitive basis rather than letting credit card companies set price-fixed fees charged by virtually all the banks that issue their credit and debit cards.

As part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, debit card swipe fees are limited to a flat fee of 21 cents per transaction, plus 0.05 percent of the purchase price. The House Financial Services Committee is scheduled to begin consideration today of the Financial CHOICE Act, legislation sponsored by Chairman Jeb Hensarling, R-Texas, that would repeal debit swipe fee reform as part of a broader rewrite of Dodd-Frank.

Prior to the cap, banks charged retailers one to two percent of the purchase amount to process debit card transactions, driving up the total amount paid by consumers. That amounted to about 45 cents on the typical debit purchase but could come to several dollars on larger purchases. Without the cap, the typical debit swipe fee would likely go back to the previous 45 cents if not higher, Duncan said.

Retailers have saved about $8.5 billion a year since Dodd-Frank was enacted, and most of the savings has been passed along to consumers, according to a study conducted by noted economist Robert Shapiro.

NRF is the world’s largest retail trade association, representing discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, chain restaurants and Internet retailers from the United States and more than 45 countries. Retail is the nation’s largest private sector employer, supporting one in four U.S. jobs – 42 million working Americans. Contributing $2.6 trillion to annual GDP, retail is a daily barometer for the nation’s economy. NRF’s This is Retail campaign highlights the industry’s opportunities for life-long careers, how retailers strengthen communities, and the critical role that retail plays in driving innovation. nrf.com

Contact:
Robin Roberts
press@nrf.com
(855) NRF-Press

Source: NRF

NACS releases statement regarding Hensarling’s intention to mark up the Financial Choice Act

Alexandria, VA, 2016-Sep-10 — /EPR Retail News/ — Lyle Beckwith, senior vice president of government relations of the National Association of Convenience Stores (NACS), today (9/9/2016) released the following statement regarding House Financial Services Committee Chairman Jeb Hensarling’s announced intention to mark up the Financial Choice Act, which includes a provision to repeal debit swipe fee reform:

“NACS is deeply disappointed that Rep. Hensarling will try to repeal debit swipe fee reform.  Repeal would allow the credit card Goliaths to resume price-fixing of debit-card fees and block smaller card networks from competing with them for business.

“Even with reform, the dominance of the Visa-MasterCard duopoly means retailers and consumers in the United States pay the highest swipe fees in the world—up to seven or eight times European levels.  Without the vital protections of debit reform and the small measure of competition it has introduced to the market, consumers would face higher prices and smaller merchants would face even greater burdens—especially convenience store owners.  Higher swipe fees, which on average are the fastest-growing expense and second-largest operating cost for retailers, cost American consumers tens of billions of dollars every year.

“We strongly urge Congress to put the interests of merchants and consumers ahead of the credit card giants by voting against the Financial Choice Act.”

Six years ago, debit reform passed (with bipartisan support in the Senate) as an amendment to the Dodd-Frank Wall Street Reform package. The reform stated that centrally price-fixed swipe fees on debit transactions had to be “reasonable and proportional” to the cost of processing the transaction. Importantly, the reform ensured that competition among debit networks continued.

Debit swipe fee reform has helped both merchants and consumers alike. Merchants have seen transparency for the first time when a customer swipes a debit card. And according to an economic report released by the Merchants Payments Coalition, cutting debit fees put $5.8 billion in consumers’ hands through lower prices and created 37,500 new jobs annually.

Founded in 1961 as the National Association of Convenience Stores, NACS (nacsonline.com) is the international association for convenience and fuel retailing. The U.S. convenience store industry, with more than 154,000 stores across the country, conducts 160 million transactions a day, sells 80% of the fuel purchased in the country and had total sales of $575 billion in 2015. NACS has 2,100 retail and 1,700 supplier member companies, which do business in nearly 50 countries.

Contact:

(703) 684-3600 (phone)
(703) 836-4564 (fax)

Source: NACS

Independent grocers urges Members of Congress to protect debit card swipe fee reform

ARLINGTON, VA, 2016-Sep-07 — /EPR Retail News/ — Today (Sep 6, 2016), more than 400 merchants from across the country sent a letter to Members of Congress urging them to protect debit card swipe fee reform, also known as the Durbin Amendment that was included in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.  Nearly half of the signatories were independent grocers who joined this effort to voice concern over the potential negative impacts that a repeal of the Durbin Amendment would have on their businesses.

The letter, addressed to Chairman of the House Financial Services Committee Jeb Hensarling and Congressman Randy Neugebauer calls for Congress to maintain the reforms passed as part of the Durbin Amendment and preserve increased competition in the debit market.

Greg Ferrara, senior vice president of government relations and public affairs of the National Grocers Association (NGA) stated: “As a founding member of the Merchants Payments Coalition, we are grateful for the number of NGA member companies that took action on this issue. The independent supermarket industry plays a vital role in America’s economy and when nearly 170 Main Street Grocers stand with other retail organizations and companies to tell Members of Congress about the direct benefits the Durbin Amendment has had on their businesses and the communities they serve, Congress listens.”

The Durbin Amendment has brought increased competition in the debit routing market and helped cut down the price-fixed fees that the largest U.S. banks charge merchants for purchases made on debit cards.

Contact:

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

Source: NGA