Interchange Reformers Get Weak Signal from Congress
November 25th, 2009
On October 8, 2009, people opposing the interchange status quo had another chance to get support of congress with a hearing held before the US House Financial Services Committee. The hearing was held in order to accept a testimony on the Credit Card Interchange Fees Act of 2009, HR2382, and the Expedited CARD Reform for Consumers Act of 2009, HR3639. Instead of a serious attempt to address interchange legislation, the hearing seemed to be more of a formality in regards to HR2382.
During the hearing, Committee Chairman Barney Frank, D-Mass., made it clear that he didn’t want to enact legislation that would move up the implementation date on parts of the Credit Card Accountability, Responsibility and Disclosure Act of 2009.
Strict limits were established on how and when banks can increase rates on credit card holders with the Credit CARD Act of 2009. In February of 2010, these limits are supposed to take hold. Frank and many other want to move it to December 2009 because many banks are hiking up rates now in an attempt to make a last minute profit.
Legislation Consideration
Last week, Rep. Peter Welch, D-Vt., the person that introduced HR2382, appeared before the House Financial Services committee. He urged congress to consider the struggle of the small business owner. Kathy Miller joined Peter Welch at the witness table. She is a constituent that owns a small country store in Elmore, Vermont. She complained to the panel that interchange charges cause her to lose money on small purchases. She insisted that business owners “just can’t keep absorbing fees and survive through these tough economic times.”
The Credit Card Interchange Fees Act, drafted by Peter Welch and sponsored in part by a bipartisan group consisting of 13 other house members, would let merchants impose a minimum purchase amount if consumers are paying by credit card. Visa and Mastercard would be prohibited from charging different interchange rates for rewards cards, public disclosure of merchant agreements would be required, and the FTC would have oversight authority for the merchant acquiring space.
