Retail Fly-In Staged to Save Debit Swipe Fee Reform
WASHINGTON, D.C. — The convenience store industry is prepared to fight as the U.S. House Financial Services Committee officially took up an attempt to repeal debit swipe fee reform.
Debit swipe fee reform was a key component of the Durbin Amendment, which Congress passed as part of the Dodd-Frank Wall Street reform package of 2010. The provision ensured competition among debit networks and gave banks incentives to compete on the swipe fees they charge merchants rather than all charging the same price-fixed fees, explained NACS, the Association for Convenience & Fuel Retailing.
However, this week U.S. Rep. Jeb Hensarling's (R-Texas) formally introduced the Financial CHOICE Act of 2017, which would repeal and replace Dodd-Frank. Hensarling is the chairman of the House Financial Services Committee.
The bill is expected to be marked up by the committee as early as Tuesday, May 2, and could be considered by the full House of Representatives by mid-May, according to NACS.
As the House Financial Services Committee was hearing testimony from witnesses on April 26, a group of 40 retailers representing 10,000 convenience stores were holding nearly 100 meetings with lawmakers on Capitol Hill.
The retail fly-in was organized by NACS, the National Retail Federation, the Retail Industry Leaders Association, and the Merchant Advisor's Group.
"NACS strongly opposes the Financial Choice Act as long as it includes a provision to repeal debit swipe fee reform. Reforms have saved consumers $30 billion and created tens of thousands of jobs," said Lyle Beckwith, senior vice president of Government Relations at NACS.
"The proposed repeal would raise costs for and dampen job-creating investment by small businesses and drive up prices for consumers, while generating even greater profits for the giant banks who already benefit from the highest swipe fees in the world, even with reform in place," he said.
According to Beckwith, repealing debit reform "would take savings out of the hands of consumers and line the pockets of the largest banks and the two network giants — Visa and MasterCard — restoring their monopoly power to price-fix fees."
In turn, the lack of competition would hurt small business and consumers and increase costs for convenience store owners, for whom swipe fees are already, on average, their fastest-growing expense, he explained.
"The potential harm to competition, consumers and small business to benefit the credit-card Goliaths is the reason repeated attempts to repeal swipe fee reform have failed. And it's why, once again, NACS will keep doing everything in our power to build on the strong opposition to repeal and ensure that members of Congress recognize the success of this vital reform in establishing competition in the debit-card market," Beckwith said.