The National Restaurant Association has sent a letter to every member of the U.S. House Financial Services Committee this week, urging them to support full and swift implementation of the Durbin Amendment, which was passed in the House last summer as part of the financial-services reform bill.

The NRA’s interest in this implementation stems from a component in the bill that pertains to consumer debit card use. The Durbin Amendment, which passed by a 64-33 vote, authorized the Federal Reserve to publish regulations to ensure that the swipe fees merchants get charged when guests pay by debit card are reasonable and proportional to the cost of processing those transactions.

The Federal Reserve issued proposed regulations in December. The proposal is due to be finalized by April 22 and go into effect by July 22.

The House Financial Services panel's subcommittee on financial institutions and consumer credit held a hearing on the issue Thursday. The NRA is represented as an executive committee member of the Merchants Payments Coalition, a broad alliance representing millions of businesses, from restaurants to florists and convenience stores.

The National Restaurant Association "urges you to allow the Federal Reserve to continue the process of implementing the provision as directed under the law," said Scott DeFife, NRA’s executive vice president for Policy and Government Affairs, in the letter. “The system of fees and contractual restrictions that Visa and Mastercard place on everyone who accepts their cards as payment, including restaurants, isn't working.

"Many of these swipe fees and restrictions benefit the card networks and card-issuing banks at the expense of merchants and, ultimately, consumers," DeFife added. "Swipe fees on debit and credit card transactions, which amount to $48 billion annually, have been a growing expense for restaurants, and are the third highest cost for many establishments, usually following only labor and food expenses.

"Debit transactions are directly drawn from a consumer's checking account, yet the interchange rate on debit transactions continues to increase," DeFife said.  "This provision would modernize our financial payments system, provide relief to businesses who have seen their interchange fees skyrocket in recent years, and benefit consumers in the form of lower prices. We urge your support in allowing the Federal Reserve process to continue without delay."

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User Comments – Give us your opinion!
  • emma waters
    Interchange fees on credit cards is one of the talk of the town today. In the next few months, congressional legislation is set to cut back debit and charge card interchange fees to 12 cents per transaction. Banks and some legislators are trying to slow the implementation of this new law, worried that it will hurt small business competitiveness. For small business owners, this legislation wouldn't improve competitiveness. Instead, these fee limits are what could keep smaller businesses competitive.
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