Retailers may have lost the battle over interchange when they failed to convince the U.S. Congress to add strong language about interchange to the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (Credit CARD act), which was signed into law in May. But they haven't given up the fight.
The proposed bill would create a special exemption from federal anti-trust law so retailers could negotiate "access" to electronic payment systems en masse.
HR 2695, which closely mirrors legislation approved by the House Judiciary Committee in 2008 but didn't progress further, would allow for a limited number of parties around the negotiating table, as follows:
Acquirers, issuers and merchants would each have to provide itemized lists of costs incurred in providing or using card acceptance services the previous year.
Mallory Duncan, Senior Vice President and General Counsel at the National Retail Federation, said that in the wake of the Credit CARD act, the Conyers bill creates "the perfect storm" for congressional action on interchange. And he raised the specter of the economy, arguing "consumers can't continue to pay artificially inflated prices just so the credit card industry can skim profits off the top."
Edward Yingling, President and Chief Executive Officer of the American Bankers Association disagreed. Interchange serves an important purpose, and retailers just want to get out of paying their fair share, he said. "The bill introduced today represents an effort by the merchant community to have the government interfere with the payment system so that they can reduce their cost of doing business," Yingling said in a June 4 statement. "It's clear that giant retailers want to pocket interchange revenue and continue to receive the added convenience and protection payment cards provide."
HR 2695 has not yet been scheduled for public hearings. Some Washington insiders suggest it is mostly symbolic because both retailers and banks are key constituencies that lawmakers aren't eager to alienate, especially in the current economy. And any way you cut it, one of those constituencies loses with interchange legislation.
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