The petition, entitled "Fight Unfair Credit Card Fees," said, "The credit-card interchange fee is the biggest credit-card fee you've never heard of. Nearly $2 of every $100 American consumers spend using credit cards goes directly to the credit-card industry through the interchange fee. In 2008 alone, Americans [image-nocss] paid over $48 billion in interchange fees, more than twice what was paid in credit card late fees and three times ATM fees. The average American household paid $427 in credit card interchange fees last year. Total interchange fee revenues have tripled since 2001.
"But unlike credit card late fees or ATM fees, credit card interchange is set in secretconsumers don't know they're paying it through higher retail prices.
"What's more, the same reckless, predatory lending practices that led to the sub-prime mortgage meltdown still prevail with credit cards. Fat interchange fees have created a perverse incentive for the big banks to abandon responsible lending practices in favor of maximizing fee income.
"Because the big banks care more about consumers using their cards as opposed to paying them off, interchange has quickly become one of the root causes of billions in toxic credit card debt on the books of the big banks. The Wall Street Journal ("Credit Cards Are the Next Credit Crunch," 3/10/09) has already identified credit-card debt as the next big shoe to drop on the American taxpayer.
"Protecting Americans from reckless big-bank credit-card lending depends on Congress reforming the interchange fee system. Congress can't fix the financial services industry without reforming huge, hidden credit-card interchange fees."
In the company's annual report, Alain Bouchard, president and CEO of Laval, Quebec-based Alimentation Couche-Tard Inc., Circle K's parent company, said, "There's one other significant drag on our profitability, and we have decided to do something about it. I'm referring to the now exorbitant fees for processing e-payments set by the credit-card industry."
He added, "Electronic mode payment costs have exceeded pre-tax profits in the U.S. convenience store industry for the last three years and the gap is widening dramatically. Based on published industry results for calendar 2008, total fees have more than doubled to $8.4 billion while industry pre-tax profits have sunk to $5.3 billion. That's not a typo. According to this report, only 13% of these fees actually pay for the transaction interchange, the rest goes into reward programs, marketing campaigns and profits."
Bouchard concluded, "We are taking a lead position on this issue. I'm not a person who normally seeks out regulation, but fees here are four times those in Australia, where sensible controls have been set. We have met with the ministers of Finance and Industry here in Canada and there are motions now in front of the U.S. Congress and the Senate where we have bipartisan support. I hope to have news in the near future."
Circle K also has a link on the petition on Facebook. And its website has a link to a related petition on www.unfaircreditcardfees.com, created by the Merchants Payments Coalition, which includes such groups as the National Association of Convenience Stores (NACS), the Petroleum Marketers Association of America (PMAA), the Society of Independent Gasoline Marketers of America (SIGMA) and many other regional and state petroleum marketer and convenience store associations.
Click herefor CSP Daily News coverage of 7-Eleven's petition.
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