The National Retail Federation, the North Dakota Retail Association and the North Dakota Petroleum Marketers Association announced the launch of a radio campaign urging Senators Kent Conrad (D-ND) and John Hoeven (R-ND) to oppose efforts to delay a new federal law that would save retailers and consumers more than $1 billion a month by lowering “swipe” fees banks charge to process debit card transactions.
The ads have been bought in DC, Alaska, Arkansas, Colorado, Maine, Montana, New Hampshire, North Carolina, North Dakota, South Carolina and West Virginia.
“Two out of every one hundred dollars we spend in stores or online go to the credit card industry,” the new radio ads say. “America needs swipe fee reform now, not later. Call Senators Conrad and Hoeven today… Tell them to stop the big bank credit card industry from swiping our money.”
The one-minute ads are running on stations across North Dakota this week as part of NRF’s nationwide 60-day lobbying, grassroots and media campaign aimed at ensuring that swipe fee reform passed by Congress last year goes into effect as scheduled on 7/21.
A provision in the 2010 Wall Street reform bill will reduce the fees by an estimated 70%, saving about $14 billion a year that retailers plan to pass along to their customers through discounts or other benefits, but the banking industry is spending millions of dollars to delay the reform.
“Congress concluded last year that swipe fees have been driving up prices for consumers by far too much for far too long,” said NRF President and CEO Matthew Shay. “Now that Congress has done something about these fees, retailers are ready to pass the savings along to customers through lower prices and higher value. We want to make sure swipe fee reform takes effect as planned, and consumers get to enjoy those new benefits as soon as possible.”
Conrad voted in favor of swipe fee reform when the Wall Street reform bill was considered in Congress last year. Hoeven is a first-term senator and had not been elected when the vote took place.
Legislation introduced in March by Senator Jon Tester (D-MT) would delay implementation of swipe fee reform by two years and require a new government study of the issue. Earlier this month, he said he would modify the bill to seek a 15-month delay, including a six-month study, six months for the Federal Reserve to draft new regulations replacing those proposed in December, and three months to prepare for implementation.
Banks’ call for further study comes despite the fact that Congress held seven hearings and ordered two Government Accountability Office studies before passing reform. Federal Reserve Chairman Ben Bernanke has testified before Congress that he has all the information he needs to prepare final regulations on schedule with no need for delay.
Swipe fees, officially known as interchange fees, are a charge averaging 1-2 percent for debit cards and 2-3 percent for credit cards taken by banks each time a card is used to pay for a purchase. The fees have tripled over the past decade to about $50 billion a year, and drive up prices paid by consumers by an estimated $427 for the average household. Debit cards account for about $20 billion of the total.
Congress has yet to deal with credit card swipe fees but included swipe fee reform for debit cards in last year’s Wall Street bill. Regulations proposed by the Federal Reserve to implement the provision would lower debit card swipe fees from their current level of 1 to 2 percent of each transaction to a flat fee of no more than 12 cents per transaction for large banks that adhere to fee schedules set by the card companies. Banks that set their own rates would be free to charge any fee they believe the market would bear provide that they do so independently. Financial institutions with less than $10 billion in assets are exempt.