A Choice Between Wall Street And Main Street

On swipe fee reform, banks are drawing a clear line in the sand for lawmakers, but will retailers do the same?

For years now, the retail community has been working hard to educate members of Congress and other policy makers across the country regarding the abusive tactics of the banks and credit card companies in their dealings with retailers over interchange fees. Nobody has played a bigger role in that effort than the convenience store industry, and a significant share of the credit for passage of last year's Durbin amendment should be attributed to this sector.

Convenience store owners and other retailers did a remarkable job of shedding light on the everyday practices that the credit card companies employ when dealing with business owners both large and small, and underscoring the punitive measures they employ on retailers who push back. Of significant importance to small business owners were provisions that empowered the Federal Reserve Board to, among other things, set reasonable limits on the amount of money that credit card companies could assess retailers for debit card transactions. No longer were the big banks and credit card companies going to be allowed to unilaterally extort ridiculous transaction fees from retailers every time a consumer chose to access their own money — or so we thought.

Empowered by the election results that brought us a new House majority, those same banks and credit card companies are back with a vengeance and trying to turn back the clock on the progress retailers made last year. One of their more reliable friends in the Senate, Sen. Jon Tester (D-Montana), introduced legislation on their behalf to “delay” implementation of the new law, and the banks have subsequently launched a full-scale carpet bombing of Capitol Hill. Senators are being told in no uncertain terms that either they support this legislation or they will face the full political wrath of the banking industry in their next election. And because the banks have been generously bailed out by taxpayers while at the same time had free reign to fleece retailers and consumers, they had accrued a formidable and daunting war chest.

The banks are a uniquely powerful political adversary. First, they have almost unlimited funds and will do whatever it takes to pressure elected officials into acquiescing to their position. The second aspect is their willingness to say both publically and privately anything to help make their case regardless of whether it has any relationship whatsoever with the facts.

Small retailers must engage their elected members of Congress, correct the record and have them understand what a small retailer goes through when dealing with these credit card companies. That education, echoed by hundreds of small business owners in each Congressional district, is critical to countering the misinformation campaign being perpetuated by the banks. We have to give them exacting clarity that this is a fundamental choice between Wall Street and Main Street.

Also, the retail community has to exact a political price for undermining us on this issue. The banks are drawing a clear line in the sand and taking names on this. If you are against them now, they will be against you later when you run for reelection. Will we do the same? Will all the affected sectors of the retail community return the favor to Sen. Tester when he runs again and raise significant dollars for his opponent? The banks are certainly telling Congress that the answer to that question is no. Could they finally be telling the truth for once?

Editor's note: The opinions expressed in this article are the author's, and do not necessarily reflect the views of Convenience Store News.