The Federal Reserve would be required to consider [image-nocss] banks' actual costs for processing the transactions and the fact that paper checks drawn on the same accounts are paid at face value. The amendment would also bar the card industry from interfering with merchants who offer a discount or other benefit to customers who pay by cash, check or debit card rather than credit cards, and would allow merchants to set minimum purchase amounts of up to $10 for credit cards.
The law, named after its principal authors, Senator Christopher Dodd (D-Conn.) and Representative Barney Frank (D-Mass.), gives the government new authority to deal with failing financial firms that may threaten the entire system, imposes new rules on derivatives markets and creates a consumer-protection agency at the Federal Reserve to monitor everything from home loans to credit cards, said a Bloomberg report.
Obama said the new rules will provide "the strongest consumer financial protections in history." He vowed it will bring to an end taxpayer bailouts of financial firms.
Enactment of the law gives Obama a victory on a third signature issue, after the $862-billion stimulus package last year and the overhaul of federal health-care law enacted in March, said Bloomberg.
The retail industry claimed a huge victory on the interchange-fee issue after a long, hard, high-profile battle with band credit issuers, but vowed to keep pressure on as regulators draft the details of how and to what extent the reforms will be implemented. Treasury Department and other officials now begin writing the regulations that will give the framework for enforcing the law, a process that may take a year, said a Bloomberg report.
Click hereto view a transcript of the President's remarks on the signing of this legislation.National Association of Convenience Stores (NACS) president and CEO Hank Armour said, "This legislation represents a huge accomplishment that we could not have achieved without the significant response of NACS members to our grassroots calls to action. Our Interchange Fee Reform Petition Drive gathered more than 5.4 million signatures demanding that Congress take action to reform the interchange system, making it the largest petition drive on a legislative issue in U.S. history. Further, the thousands of person-to-person calls and meetings by our members with their elected representatives as well as the letters that many of them wrote were vital in communicating the facts supporting our initiative and the passion constituents had for the issue."
He added, "The war on interchange fees is far from over. We must engage with the Federal Reserve over the next nine months to ensure that appropriate standards are issued, and we must continue our battle to reduce interchange fees on credit-card transactions."The Merchants Payments Coalition (MPC) said, "This historic legislation...represents a huge win for American small businesses who have been fighting for fairness and transparency in credit- and debit-card swipe fees. [Yesterday's] 'Main Street' victory means that things just got easier for business owners and their customers. This bill represents the sort of Main Street stimulus that this country has been waiting forand brings real, tangible benefits for merchants and their customers. The President's signature on financial reform legislation gives us the ability to lower our costs, create more jobs, provide more benefits for our customers and keep growing and contributing to the economy."
It added, "The MPC and its more than 100 associations, 2.7 million stores, and 50 million employees applaud the Senate, the House and the President for their hard work on this legislation... We thank the members of Congress who stood up for Main Street, and we thank the millions of customers who stood with us to make this happen."
The National Retail Federation (NRF) said it welcomed the signing of financial reform legislation that includes landmark provisions to control the $48 billion in swipe fees paid by retailers and their customers each year, and urged regulators to follow Congress' intent of achieving major reductions in the fees.
"This is a dramatic first step in the fight to control rising credit- and debit-card fees and has tremendous potential for savings, but we know the fight isn't over," NRF President and CEO Matt Shay said. "Big banks lobbied hard to keep this legislation from becoming law, and we fully expect them to put pressure on the Federal Reserve as it drafts the regulations intended to result in the 'reasonable' debit-card fees sought by Congress."
He added, "Congress realizes that debit cards are simply plastic checks, and has said the Federal Reserve should look at them with paper checks in mind. The result shouldn't be swipe fees being cut by a quarter or even a half. The result should be plastic checks that get paid at essentially face value."
Retail Industry Leaders Association (RILA) president Sandy Kennedy said, "[It] is a great day for retailers who have fought for years to bring fairness and transparency a broken system. The swipe fee reforms...will benefit America's retailers, small and large, and their customers by reining in the excessive debit swipe fees imposed by credit-card companies and big banks. We applaud leaders in Congress, specifically Senator [Dick] Durbin (D-Ill.) and Representatives [Peter] Welch (D-Vt.) and [Bill] Shuster (R-Pa.) for standing up for America's retailers and consumers and we look forward to working with the Federal Reserve to ensure that the goals of reform are preserved as the rulemaking process moves forward."
The swipe-fee reform language was based on an amendment introduced by Durbin. Welch Shuster were instrumental to consideration of swipe fee reform in the House.
Leslie G. Sarasin, president and CEO of the Food Marketing Institute (FMI), said, "Retailers and their customers are winners today. Consumers have been paying more than $50 billion a year in hidden swipe fees to credit card companies and banks every time they swipe their credit or debit card. We applaud the President for signing this law to bring fairness and transparency to these fees."7-Eleven franchisee Dennis Lane attended yesterday's financial reform bill signing, Dallas-based 7-Eleven Inc. said. "I am honored to be a part of this historic day," said Lane, who has owned his 7-Eleven franchise in Quincy, Mass., for 36 years. "The President's signature on this piece of legislation is a great victory in a hard-fought battle and is a clear win for Main Street businesses and our customers."
Lane said he has made good on a promise he made at a House leadership press conference following that chamber's vote to pass the legislation. With some of the anticipated savings he will see from swipe-fee reform, he has hired a new full-time employee.
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