Skip to comments.PIERCING THE VEIL: CANNON, CONYERS INTRODUCE LEGISLATION TO SAVE AMERICAN FAMILIES BILLIONS
Posted on 03/06/2008 2:42:54 PM PST by hardknocks
WSAHINGTON DC Congressman Chris Cannon (R-UT), along with Judiciary Chairman John Conyers (D-MI), today introduced the Credit Card Fair Fee Act (HR 5546) to address the anti-competitive aspects of credit card interchange fees and save American consumers and American families billions every year. Upon introducing this legislation, Congressman Cannon said,
Free market capitalism is the most successful economic system the world has ever witnessed. Bedrock principles of that system include transparency and competition. The current system of setting fees that merchants pay for credit card transactions is anti-competitive and secretive. This bill does not set prices. Instead, it would require that fees be set in a transparent manner so other companies can compete for business and consumers would not pay artificially high rates.
Cannon continued, In the end, credit card companies should set whatever fees the market will tolerate. This bill is a win for consumers, for retailers, and for the credit card industry which will benefit from competition.
In closing, Congressman Cannon said, This is a complicated issue. This bill may not be the final answer, but societys interest in this is so great that we hope all interested parties will come to the table.
For more information, please visit: http://chriscannon.house.gov/ChrisCares/CreditCards.htm
For a graphical depiction of how this bill would mandate negotiations, please visit: http://chriscannon.house.gov/UploadedFiles/ccflow.pdf
Each year, consumers pay billions of dollars in hidden fees that never appear on their monthly statements. Those fees are called Interchange fees.
Credit card companies and their banks charge them to store owners, businesses, or anyone else anytime a credit card is used to make a purchase. As much as $2 of every $100 you spend goes to interchange companies or the banks behind the card.
Last year, more than $36 billion in interchange fees were collected, up 17 percent from 2005 and 117 percent since 2001. The average American family is now paying more than $300 a year in credit card interchange fees. Retailers then pass along the credit card interchange fee to consumers in the form of higher prices. The credit card interchange fee increases the price of everything consumers buy, even those who don't use plastic and choose instead to pay for their purchases in cash or by check because retailers are not allowed to offer lower prices for cash or debit transactions because of their agreements with Visa and Mastercard.
For example, with the price of gas at more than $3 a gallon, credit card companies and their banks are collecting as much as 8 cents a gallon in interchange fees. Americans are paying the highest interchange fees in the world, an average of two percent, compared with less than one percent in most other industrialized countries.
Credit Card fees have a complex pricing structure, which depends on the card association, the type and size of the merchant, the type of credit card and the type of transaction. Convenience stores, supermarkets, warehouse clubs and other merchants that sell low-margin items may have lower rates. Hotels and car rental businesses have higher rates. Among transactions, those with a credit card have higher rates than those with a signature debit card, whose rates are in turn higher than PIN debit card transactions. Sales that are not conducted in person, such as over the phone or Internet, have higher interchange rates, apparently due to their increased risk of fraud.
Simple I don’t have a credit card. I use my debit card and just spend what I realistically can.
It is a free market. I chose not to use them.
Sorry, this is stupid government regulation.
You miss the point. Retailers are being charged for the privilege of accepting credit cards in the US more than any other country. The true cost is passed on to consumers be it cash, credit or debit.
well, most people find credit cards useful.
I use cash and debit.
It’s not the purpose of the government to think for the people or play nanny. These are adults, if they’re stupid, that’s their problem.
Sounds like “anti-boilerplate” legislation. So far, OK by me.
Surprisingly it looks like there is bipartisan support on this issue.
Yeah, somebody's making money on this and government doesn't think it's getting a big enough cut of the action.
I think that’s why people are jumping on this.
Well that's nice for you, but what about those of us dumber than a bowl of mice who go out and spend with shocking irresponsibility, the thought of actually making good on the debt we run up never occurring to us, buying un-needed and un-wanted items on a whim or to satisfy some momentary impulse.
What about us I say!
There must be some way for us to pass our burden off to the responsible members of society, and Cannon and Conyers are just the folks to do it. Control the credit card companies fees, have them raise the rate they receive from retailers and pass the increase along to everyone.
It's only fair.
If what I just wrote made you sad or angry,
it was probably just a joke.
And if it weren’t such a valuable service, no one would bother to pay for it.
Consumers are charged more for Milk in the US too. Maybe more regulation in that industry would help consumers too. Oh wait, never mind...
Gosh, so sorry..guess I am just soooo lame. I use credit cards and when I was in a crunch they helped a lot. Guess I am just not so brilliant as those who “NEVER” use credit cards.
Reminds me of the “ I never watch TV “ snobs.
Ok, now flame me.
The merchant effectively pays the same interchange fees on your debit card transactions.
No - I think you’re missing the point. The government isn’t getting anything out of this - the point is that the credit card companies have been taking huge bites out of small businesses’ profits for years which has forced them to raise prices which has hurt consumers. The point of this is to rein in their to this point unregulated practices. You have to admit that the credit card companies have a tendency to go overboard with their fees.
A credit card is optional, people sign a contract that spells out the terms, and the people choose to spend the money. Now some government bureaucrat wants to “save the stupid people” of this nation with another law. Dont confuse this with all the other spotted owls, whales, or planet were trying to save. Democrats save the environment, Republics the economy and BOTH are for the middle class. Politicians are always on the lookout for some theme that hits the cord of the masses, no matter how stupid.
But thank God they opened up with the statement that they believe in capitalism and free trade, yadda, yadda, yadda. Thats like saying I have a friend that’s black but........ I have a friend that’s a Jew, but....... Give me a break, don’t piss on me and tell me it’s raining. It’s more government intrusion, more regulation, more controls on financial activities.
I’ve worked with several companies regarding this sort of thing. When we implemented a debit card processing project, part of our testing (which found serious bugs, btw) was to verify we were being charged the correct interchange fees for the correct transactions.
Heck, the reason we were adding the specific debit functionality was because the fees are much lower on debit cards.
Card-not-present debit transactions are SERIOUS money savers for utilities, schools and government agencies. For large companies, it can save millions EVERY YEAR.
Any business is perfectly free to NOT offer their customers credit card privileges. Cash only. Or check only. Or both.
>>Gosh, so sorry..guess I am just soooo lame. I use credit cards and when I was in a crunch they helped a lot. Guess I am just not so brilliant as those who NEVER use credit cards.
Reminds me of the I never watch TV snobs.
Ok, now flame me.<<
Heh,heh. I haven’t had TV since ‘97. But if I were a sports fan it would not have been possible.
We all have our own temptations to deal with. A promiscuous heterosexual male has nothing to be proud of compared to a flaming practicing homosexual cross dresser. They are both giving into their particular temptation/sin.
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