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 society’s 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.
Duh! It’s election year. Beware!
Our congress critters will be falling all over themselves to show they are “working for us” (and in bipartisan fashion, no less).
Somehow, I doubt it.
You mean there isn't such a thing as a free lunch?
You mean Hillary-care won't be free? Next you're going to tell me that granting no permits to build nuclear power plants for 25 years, ANWR, and setting up ridiculous bureaucratic hurdles to obstruct the building of refiners for many years has consequences too?! You're crazy!/sarc
There isn’t any competition now. It’s Visa and Mastercard or you go out of business.
You are affected whether you use cash or credit. The costs associated with these fees are passed onto the consumer by the merchant, so the price of the product is adjusted for everyone, not just the folks who use credit.
So, you want government to set the price, de facto or de jure? What a conservative you are! What a free market advocate!
Uh no. This legislation wants the fees to be transparent so that there can be actual competition.
Hidden fees? Is that a conservative policy now and I missed a memo?
No kidding? You mean I have to help support all the blood sucking leeches of society? Wow, woulda thought?
Thank goodness John Conyers, and all the other do-gooders in congress are there to save me from my plight, what would I do without them there to save me from myself?
i agree whole heartedly debit card use is moronic...why not use the other guys’s money for 30 days free....? duh. ALSO
i try to buy things at the top of the credit card billing cycle that way i am able to use a product a long long time
and if it’s defective i call the c c company and tellem im protesting the purchase....does all this make sense to everybody?
Want transparency? Then just mandate that current and new fee agreements are made public. That’s NOT what this bill does, per the linked pdf. This bill sets fees for all merchants and all credit card companies via judicial intervention OR the threat thereof. In this area, at the very least, the idiots Cannon and Conyers want classical fascist socialism, wherein there’s NO COMPETITION and the state determines the relations of production.
The legislation isn’t trying to do away with the fees.
???
Are you referring to the graph? The one that states “voluntary negotiations”?
That is not what this graph states.
So we are supposed to believe that if the Gubmint puts the kabosh on these interchange fees, retailers will pass the savings along to consumers? Riiiight.
Makes sense to me! :-)
Labeling negotiations as “voluntary” doesn’t make them voluntary. Note the threat of government intervention on the flowchart.
That use of language is an example of how corrupted, misleading, and stupid congressmen and their staffs are.
Nah, that doesn’t say that at all. The panel of judges could very well be professionals in the industry.
No idea until we read the actual language of the legislation.
To stay competitive they will.
Dear Lovebloggers,
Trust me, I have only your best interest at heart.
BTW, try to convince others of that too.
Thanks,
John Conyers
Yeah I know, I don’t trust him either. That said, I am open to hear more about this. Transparency is not something I am opposed to.
Oh, yeah. Your government-designated price-fixing panel will do a great job. Do you have any clue about the history of regulatory economics?
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