"It's the fee that the banks don't want you to see," MPC spokesperson Peter Mirijanian told the paper.
After failing to get traction last year in the House, lobbyists for the retailer group--whose members include, among other national retail groups, the National Association of Convenience Stores (NACS), Petroleum Marketers Association of America (PMAA), National Association of Truck Stop Operators (NATSO), Society of Independent Gasoline Marketers of America (SIGMA) and many state petroleum marketer, c-store and retail groups--have been blanketing Capitol Hill trying to pressure lawmakers to add it to the credit-card bill.
Dodd's bill currently includes only an interchange study provision, said the report.
"We're consistently having serious conversations with key players in Congress," one lobbyist for the retailers told Roll Call. "We've been pretty well-received, and there's a lot of interest in this issue."
According to the NACS website, NACS retail members cite credit-card fees as their third largest store-level operating expense, following labor and rent. In 2007, the convenience and petroleum retailing industry reported a pre-tax profit of $3.5 billion and $7.6 billion paid in credit card fees. At the motor fuel dispenser, credit card fees are often greater than the profit a retailer earns on each gallon sold. The largest component of these fees is interchange, a fee charged by the cardholder's bank to the retailer's bank and passed on to the retailer. Across all industries, in 2001, Visa, MasterCard and their issuing banks collected $16.6 billion in credit card interchange fees. By 2005, these fees increased to $30.7 billion--more than the total amount of penalty fees and ATM fees combined. Interchange fees are far higher than the actual processing costs and risks involved, yet these transactions fees continue to rise.
The Electronic Payments Coalition (EPC) has answered the merchants with a massive lobbying push of its own, saying the merchants are simply "venue shopping" to get the provision added to any potential legislative vehicle. "Interchange has nothing to do with the contents of the Dodd credit card practices bill, that's a consumer issue," EPC spokesperson Trish Wexler told the paper. "At the end of the day, merchants don't want to pay their share of the interchange system and they want consumers to pay it instead."
Visa and MasterCard, which together control 80% of the credit card market, argue that the fees are necessary to cover their infrastructure costs, and that they are also the ones guaranteeing payment to the merchants and should be compensated for that risk. Card companies also argue that the interchange fee issue is not germane to the credit-card bill, which is aimed at consumer concerns, and that forcing the amendment onto the legislation could poison the entire package.
This is the merchants' latest attempt to try to get language on the issue, the report said. Last year, the coalition lobbied on a bill before the House Judiciary Committee that would have given merchants the ability to negotiate fees with banks under the guidance of the Justice Department.
The merchants also tried unsuccessfully to get the language in the House version of the credit-card bill earlier this year.
Both sides have put forward their most sympathetic voices, with small mom-and-pop merchants speaking out against the fees, and community banks and credit unions arguing that they are necessary, said the report.
Senate Majority Whip Dick Durbin (D-Ill.) is likely to take up the merchants' cause and spearhead an interchange fee amendment, financial services lobbyists told the paper. Durbin introduced interchange fee legislation in the previous Congress, but it failed to make it out of the Senate Judiciary Committee.
Durbin, who unsuccessfully led the effort to include "cram down" on the bankruptcy bill last week--a provision that would allow bankruptcy judges to modify a homeowner's mortgage terms--has verbally expressed his frustration with the financial services industry, which could fuel his desire to make sure something gets done on interchange fees this time around, lobbyists added.
"I would hope that the Senator wouldn't use bad policy as a retribution tool," one financial services industry lobbyist told Roll Call.
Click on the links below for the industry associations' credit-card fee webpages:
MPCNACSNATSOPMAASIGMA
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