The fight in the U.S. over debit interchange caps mandated by the Dodd-Frank Act of 2010 has flared since the Nov. 8 elections swept a Republican president and Congress into office. While issuing banks and credit card networks offered research that said consumers were on their side regarding a possible repeal of the Durbin Amendment, retailers struck back Tuesday when more than 600 of them made their case in a letter to Congressional leaders.
The letter to House Speaker Paul Ryan (R-Wis.) and House Minority Leader Nancy Pelosi (D-Calif.) is in response to the Financial CHOICE Act—legislation proposed this summer by House Financial Services Committee Chairman Jeb Hensarling (R-Texas). The bill is not likely to come to a vote before the end of the 114th Congress, but could have an easier time next year when the Senate, the House of Representatives and the White House are dominated by Republicans.
“As cornerstones in the business community, we are staunch supporters of free enterprise, and generally do not support any market intervention unless markets are not functioning efficiently,” the letter said. “Credit and debit card acceptance is a prime example of a non-functioning marketplace. Language included in Section 335 of the Financial CHOICE Act (HR 5983) would dismantle the substantial progress debit reforms have made in correcting in part an otherwise non-functioning and non-transparent card acceptance marketplace in the United States. We strongly urge you not to take up any divisive legislation that repeals debit reforms. Existing debit card fee reforms matter a great deal to our individual businesses.”
Interchange represents a significant cost for all retailers, but especially for card-not-present merchants who typically are burdened with higher rates.