FMI and MPC Praise Senator's Effort to Investigate Interchange Fees
ARLINGTON, Va. and WASHINGTON -- The Food Marketing Institute (FMI) and the Merchants Payments Coalition (MPC) both applauded Republican Senator Norm Coleman's charge for the Permanent Subcommittee on Investigations -- of which he is a ranking member -- to examine how interchange fees paid by retailers increase consumer prices.
The call to action was made at a Senate Homeland Security and Government Affairs Committee hearing on abusive credit card industry practices.
"Interchange fees can significantly impact the prices charged by retailers, many of whom already operate on extremely thin profit margins. Ultimately, it is the American consumer who bears the cost of these interchange fees," Coleman said in an opening statement at the hearing: "Credit Card Practices: Fees, Interest Rates, and Grace Periods."
"We are very pleased that the Senate is shining a bright light on one of most abusive credit card practices of all," said Mallory Duncan, senior vice president and general counsel at the National Retail Federation and chairman of the MPC. "Interchange is the biggest fee you've never heard of, costing American consumers more than $30 billion a year. But unlike other credit card fees, interchange never shows up on your monthly statement."
"Interchange is by far the most costly card-based fee paid by Americans," said FMI President and CEO Tim Hammonds. "It's also important to know that these fees are fixed in secret by Visa and MasterCard and their card-issuing banks with rules that effectively prohibit merchants from disclosing them to consumers. We applaud Senator Coleman for calling upon the subcommittee to shine the light of full disclosure on out-of-control interchange costs and the broken system behind them."
Interchange fees totaled $30.7 billion in 2005, an increase of more than 17 percent from 2004 and 85 percent since 2001, according to the FMI.
The call to action was made at a Senate Homeland Security and Government Affairs Committee hearing on abusive credit card industry practices.
"Interchange fees can significantly impact the prices charged by retailers, many of whom already operate on extremely thin profit margins. Ultimately, it is the American consumer who bears the cost of these interchange fees," Coleman said in an opening statement at the hearing: "Credit Card Practices: Fees, Interest Rates, and Grace Periods."
"We are very pleased that the Senate is shining a bright light on one of most abusive credit card practices of all," said Mallory Duncan, senior vice president and general counsel at the National Retail Federation and chairman of the MPC. "Interchange is the biggest fee you've never heard of, costing American consumers more than $30 billion a year. But unlike other credit card fees, interchange never shows up on your monthly statement."
"Interchange is by far the most costly card-based fee paid by Americans," said FMI President and CEO Tim Hammonds. "It's also important to know that these fees are fixed in secret by Visa and MasterCard and their card-issuing banks with rules that effectively prohibit merchants from disclosing them to consumers. We applaud Senator Coleman for calling upon the subcommittee to shine the light of full disclosure on out-of-control interchange costs and the broken system behind them."
Interchange fees totaled $30.7 billion in 2005, an increase of more than 17 percent from 2004 and 85 percent since 2001, according to the FMI.