H.R. 2695, The Credit Card Fair Fee Act, was reintroduced with slight
differences from its 2008 version. The bill would grant limited
antitrust immunity to Interchange rates negotiated between merchants
and Visa Inc. and MasterCard Inc. with a representative of the U.S.
Department of Justice attending the negotiations.
U.S. Rep. John Conyers Jr., the Democrat who chairs the House
Judiciary Committee introduced the bill saying "It is not an attempt
at regulating the industry and does not mandate any particular
outcome; this legislation simply enhances competition by allowing
merchants to negotiate with the dominant banks for the terms and rates
of the fees."
Right now small and mid sized businesses pay the same Interchange fees
as larger chains. Having each merchant independently negotiate the
interchange-setting process will not benefit small merchants who don't
have the time, money or resources. As an advocate for small business,
this is a concern.
Interchange fees are very complex now but at least the same fee is
charged for a card issued from Bank of America as one issued from
Chase. Just wait until the government gets involved and negotiations
result in every bank having different fees. And just like the
disadvantage likely faced by small merchants over giant retailers, so
too will community banks be at a disadvantage over mega banks in these
negotiations.
In the battle between mega banks and giant retailers over Interchange,
let's not forget the benefits of today's level playing field where
small businesses and community banks are not disadvantaged because of
their size and ability to negotiate the most favorable terms.
Republished from Vantage Viewpoint.
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