Last year, banks took in more than $48 billion in swipe fees, costing Americans more than credit-card annual fees, cash advance fees, over-the-limit fees and late fees combined, said the Merchants Payments Coalition (MPC) is a group of retailers, supermarkets, drug stores, convenience stores, fuel stations, online merchants and other businesses who are fighting against unfair credit-card fees and fighting for a more competitive and transparent card system that works better for consumers and merchants alike.
The new House legislation is known as the Welch-Shuster Credit Card Interchange Fees Act of 2009 (HR 2382) and was introduced by Representatives Peter Welch (D-Vt.) and Bill Shuster (R-Pa.). The bill would bring transparency and competition to the swipe fee system, "giving Main Street small businesses and their customers to a fair shake," MPC said.
The Welch-Shuster legislation will require credit-card companies to disclose their swipe fee rates, terms and conditions. In addition, it will outlaw some of the most abusive rules that credit-card companies use to make sure they can keep raising their fees without any running into competitive pressures to reduce them. And the bill will empower the Federal Trade Commission (FTC) to review these rules and prohibit any practices that are found to be anticompetitive or unfair or deceptive to consumers.
Additional original co-sponsors of the bipartisan legislation are Reps. John Barrow (D-Ga.), Christopher Carney (D-Pa.), Keith Ellison (D-Minn.), Steve Kagen (D-Wis.), Zoe Lofgren (D-Calif.) and Todd Russell Platts (R-Pa.).
"We applaud Congressmen Welch and Shuster and welcome the much-needed relief this legislation would bring to small business owners and their customers nationwide," said Lyle Beckwith, senior vice president of the National Association of Convenience Stores (NACS). "Credit-card swipe fees are one of the largest expenses small businesses face and these huge, hidden fees hurt small businesses and consumers at the very time we're relying on them to rebuild our economy."
Currently, swipe fees are set in secret by the credit-card companies, said MPC, and business owners have no ability to negotiate it or even tell their customers what they are being charged. The amount banks take in from swipe fees has tripled since 2001, even as the cost of processing credit cards has dropped dramatically, the group added.
MPC's member associations collectively represent about 2.7 million stores with approximately 50 million employees.
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