[Congressional Record (Bound Edition), Volume 155 (2009), Part 10]
[Extensions of Remarks]
[Page 14105]
[From the U.S. Government Publishing Office, www.gpo.gov]




        INTRODUCTION OF THE ``CREDIT CARD FAIR FEE ACT OF 2009''

                                 ______
                                 

                         HON. JOHN CONYERS, JR.

                              of michigan

                    in the house of representatives

                         Thursday, June 4, 2009

  Mr. CONYERS. Madam Speaker, today I am introducing the ``Credit Card 
Fair Fee Act of 2009,'' legislation that would help level the playing 
field for merchants and retailers negotiating with banks for the cost 
of certain fees, and ultimately reduce the costs of everyday goods for 
consumers. I am joined by Representative Bill Shuster.
  Every time a consumer uses a payment card--at the mall, at the 
grocery store, at a gas station, or on the Internet--the merchant is 
charged a fee. This fee gets divided up three ways--between the 
merchant's bank, the consumer's bank, and the credit card company. It 
covers processing fees, fraud protection, billing statements, and other 
expenses such as system innovations.
  As much as 90 percent of this fee comprises a so-called ``interchange 
fee,'' which is the payment made by the merchant's bank to the 
consumer's bank. The percentage is set by the credit card companies, 
generally Visa or MasterCard, and averages 1.75 percent of the total 
purchase. In 2008, interchange fees from these two companies totaled 
approximately $48 billion, an increase of 189 percent since 2001. These 
fees are ultimately passed on to all consumers in the form of higher 
prices for goods and services, whether the consumers purchase these 
items by credit card, check or cash. The average U.S. family paid an 
estimated $427 in interchange fees in 2008, nearly triple the amount in 
2001.
  These interchange fees are set by the credit card companies. The two 
largest, Visa and MasterCard, control over 73 percent of the volume of 
transactions on general purpose cards in the United States and 
approximately 90 percent of the cards issued. Banks that are members of 
the Visa association are often also members of the MasterCard 
association.
  Merchants are forced to deal within this system because it is simply 
not an option to refuse to accept Visa or MasterCard from their 
customers. They are presented with take-it-or-leave-it options and are 
not part of the process by which the fees are set.
  The bill creates a limited antitrust immunity for negotiating 
voluntary agreements. This legislation is intended to give merchants a 
seat at the table in the determination of these fees. 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.
  It is time to level the playing field for merchants and consumers. I 
am hopeful that Congress can move to enact this worthwhile and timely 
legislation.

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