NRF: Keep swipe fee limits in place

The National Retail Federation (NRF) has strong feelings about credit card swipe-fee regulations.



On Tuesday, June 7, the NRF released the following statement after Rep. Jeb Hensarling, chairman of the House Financial Services Committee, announced plans to repeal swipe-fee reform and the Dodd-Frank Wall Street Reform Act.



“Today Jeb Hensarling announced that he wants to repeal an important competitive change in Dodd-Frank reform and return to the bad old days when card companies and banks freely picked the public’s pocket,” NRF senior VP and general counsel Mallory Duncan said in the statement. “Protecting bank profit margins at the expense of competition is not sound public policy and it will harm merchants and consumers. The financial services industry attempted to get Congress to reject transparency and competition in 2010 and again in 2011. Both efforts failed. On behalf of retailers and their customers, NRF will fight for free and open markets.”



Swipe fees on debit and credit cards are many retailers’ second-largest operating cost, behind labor. The NRF says these fees threaten small retailers with failure and keep merchants from hiring and expanding, slowing the entire economy. American merchants and consumers still pay the highest swipe fees in the world on debit and credit cards, according to the Federal Reserve Bank of Kansas City.



Under the Dodd-Frank Consumer Protection and Wall Street Reform Act of 2010, the Federal Reserve was required to adopt regulations that would result in debit swipe fees that were “reasonable and proportional” to the actual cost of processing a transaction. The cap, which applies only to financial institutions with $10 billion or more in assets, took effect in 2011 and totals about 24 cents on a typical debit card transaction.