[Congressional Record Volume 157, Number 49 (Wednesday, April 6, 2011)]
[Senate]
[Pages S2183-S2184]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
INTERCHANGE FEE REFORM
Mr. DURBIN. Mr. President, I continue to receive letters weighing in
on the issue of interchange fee reform. I ask unanimous consent to have
printed in the Record letters or statements from the following
organizations: the Rainbow PUSH Coalition, the Main Street Alliance,
Consumer Federation of America, and the National Black Church
Initiative.
There being no objection, the material was ordered to be printed in
the Record, as follows:
April 1, 2011.
Dear Senator: The Rainbow PUSH Coalition expresses its
views on the Durbin swipe fee reform amendment now being
debated in the Congress. Rainbow PUSH is a strong advocate of
the Dodd-Frank financial reform legislation which provides
critical consumer protections and safeguards against
predatory lending.
The Durbin swipe fee reform amendment should be implemented
as scheduled. It will usher in needed reform to bring
competition, transparency and choice to the interchange
system, and provide incentives for the retail sector to pass
on interchange savings to lower the price of products for
consumers. Numerous consumer rights organizations, civil
rights groups, universities, unions, and other constituencies
have weighed in to support swipe fee reform.
We respect the concerns that some groups have raised about
the provision, but are unconvinced that a delay in its
implementation as proposed by Sen. Tester and the American
Banking Association (representing the financial services
industry) will be beneficial to consumers and students, and
small businesses. It appears that their interest is to
maintain a deregulated environment to continue the virtual
monopoly status of the credit card transaction process, and
to protect their massive profits derived from debit
interchange fees.
Deregulation, greed and lack of congressional oversight led
to the most severe economic collapse since the great
depression. But Wall Street got billions in public funds
because they were deemed too big to fail--they've been bailed
out and are once again recording record profits and issuing
millions
[[Page S2184]]
in executive bonuses, while homeowners and working families
are still left out. The big banks are already charging
consumers higher interest rates and raising consumer fees to
record levels in virtually every dimension of banking and
credit card use. We stand ready to meet with all concerned to
ensure the implementation of a sustainable debit card system
going forward.
The Durbin credit card swipe fee amendment will afford the
protections and regulations that consumers need.
Sincerely,
Reverend Jesse L. Jackson, Sr.,
President and Founder,
Rainbow PUSH Coalition.
____
March 31, 2011.
Senator Dick Durbin,
Assistant Majority Leader, Hart Senate Bldg., Washington, DC.
Dear Senator Durbin: We write to express the National Black
Church Initiative's continued support for the Durbin swipe
fee amendment which we supported and was included in the
Dodd-Frank Wall Street Reform and Consumer Protection Act.
The current interchange system is uncompetitive, non-
transparent and harmful to consumers. It is simply unjust to
require less affluent Americans who do not participate in or
benefit from the payment card or banking system to pay for
excessive debit interchange fees that are passed through to
the costs of goods and services. As a result, NBCI does not
support Congressional delay of implementation of the new law.
As you may know, The National Black Church Initiative
(NBCI) is a faith-based coalition of 34,000 churches
comprised of 15 denominations and 15.7 million African
Americans committed to eradicating racial disparities and
improving the lives of African Americans nationwide.
We oppose efforts to delay implementation of the Durbin
amendment through Congressional action. The new law gives the
Federal Reserve adequate authority it can use without delay
to make sure that the debit interchange reimbursement
financial institutions receive covers their legitimate,
incremental costs for providing debit card services. We know
that there are banks, like BB&T for example, who would like
to delay this process. Their continued profit off the backs
of low income African Americans will no longer be tolerated
and we will continue to advocate on behalf of laws that
support our agenda.
From a consumer point of view, the current interchange
system is not defensible. Feeble competition in the payment
card marketplace has led to unjustifiably high debit
interchange fees that the poorest Americans, generally cash
customers, are required to subsidize at the store and at the
pump.
Thank you for your consideration of our views. Please
contact us directly to discuss these important issues.
Sincerely,
Rev. Anthony Evans,
President, National Black Church Initiative.
____
March 31, 2011.
To: U.S. Senators and Representatives.
Re Main Street Alliance support for implementing debit
interchange protections for small businesses in the
Restoring American Financial Stability Act of 2010.
Dear Senator Durbin: The Main Street Alliance, a national
network of small business coalitions representing small
business owners across America, writes to express our strong
support for the provision of the Restoring American Financial
Stability Act of 2010 that set out to ensure that debit card
interchange fees are reasonable and proportional. This
provision is an important step toward putting small
businesses back on stable footing by limiting burdensome fees
on small businesses when we process debit transactions.
Small businesses have faced ever-rising fees on debit card
transactions over the years. For some businesses, these
interchange fees have grown to the point that they represent
some of the highest operating costs, rivaling the costs of
labor and utilities. There is no such thing as fair
competition in this market: the card companies have a
duopoly. Limiting fees to twelve cents per transaction, as
proposed in new rules, will free small businesses from
disproportionate and burdensome costs, allowing economic
growth.
The new rules are a step forward, a step toward parity and
a reasonable balance. We ask that these rules not be delayed
further. Implementing them as planned this summer will
provide a shot in the arm for small businesses and our local
economies. Small businesses are better off with these
protections; we urge you not to allow the lobbying tactics of
the big banks deter the enactment of rules that protect small
business.
The country is counting on small businesses to serve as an
engine of economic recovery and create the jobs we need to
get people back to work across America. The debit interchange
provisions enacted in the financial overhaul last year and
codified in the new rules support these aims. We urge you to
fight efforts to delay or derail the implementation of these
rules.
Mike Craighill, Soup and Such, Billings, MT; Garry Owen
Ault, All Makes Vacuum, Boise, ID; Nancie Koerber,
Champions Real Time Training, Central Point, OR; David
Borris, Hel's Kitchen Catering, Northbrook, IL; Carson
Lynch, Gorham Grind, Gorham, ME; Tammy Rostov, Rostov's
Coffee & Tea, Richmond, VA.
Kelly Conklin, Foley-Waite Associates, Bloomfield, NJ;
Melanie Collins, Melanie's Home Childcare, Falmouth,
ME; Rashonda Young, Alpha Express, Inc., Waterloo, IA;
Jose Gozalez, Tu Casa Real Estate, Salem, OR; Rosario
Reyes, Las Americas Business Center, Lynnwood, WA.
____
Consumer Federation of America,
Washington, DC.
Position of the Consumer Federation of America on Debit Card
``Interchange'' Fee Legislation and Rules
no position on debit interchange law or on legislation to delay it
CFA did not take a position on the ``Durbin Amendment'' to
the Dodd-Frank Wall Street Reform and Consumer Protection Act
and has also not supported or opposed legislation introduced
in Congress to delay the interchange law.
federal reserve should alter proposed rule implementing debit
interchange law
CFA filed comments with the Federal Reserve in February
(http://www.consumerfed.org/pdfs/debit-cards-FRB-interchange-
rule-comments-2-22-11.pdf) that came to the following
conclusions:
The current interchange system is uncompetitive, non-
transparent and harmful to consumers. Feeble competition in
the payment card marketplace has led to unjustifiably high
debit interchange fees that the poorest Americans are
required to subsidize. It is simply unjust to require less
affluent Americans who do not participate in or benefit from
the payment card system to pay excessive fees that are passed
through to the cost of goods and services.
The Federal Reserve should ensure that financial
institutions are reimbursed for legitimate, incremental debit
card costs as it finalizes rules that implement the new
interchange requirements. In particular, the Federal Reserve
should increase proposed interchange price standards as
allowed under law to include several specific expenses
incurred by financial institutions when processing debit card
transactions. If such compensation does not occur, these
institutions could increase debit card and other related
banking charges on their least desirable and most financially
vulnerable consumers: low-to- moderate income account
holders.
Once it is implemented, the Federal Reserve should pay
close attention to how it affects the financial viability of
small depository institutions, especially credit unions,
which often provide safe, lower-cost financial services to
millions of Americans.
The Federal Reserve should launch a broad, balanced study
upon implementation of the effects of the rule on consumers.
____________________