Big Banks and Credit Card Companies Attempting to Block Interchange Law
Franchisees need to act now. On July 21, 2010, President Obama signed the Wall Street Reform and Consumer Protection Act into law. The law includes a provision (introduced by Senator Durbin) which allows the Federal Reserve to ensure that interchange or "swipe" fees on debit cards are reasonable and proportional to the cost of processing the transaction. In addition, merchants are now allowed to set minimum transaction amounts (not to exceed $10) on credit card transactions and have more freedom to choose their preferred method of payment.
The Federal Reserve is now working to finalize its rules by April 21st, as Congress directed. Unfortunately, big banks and credit card companies are trying to delay and derail this law. Less than two weeks ago, the House Subcommittee on Financial Institutions & Consumer Credit held a hearing wherein members were urged to reconsider the law, stating that its implementation would cause other fees to increase. A bill to delay and even repeal the law is set to be introduced in the next several days.
The Coalition of Franchise Associations (CFA) has been actively involved in the passage of this law, as it would lower interchange fees which are currently non-negotiable and ultimately paid for by franchisees.
FOR ACTION: Please contact your Representatives and Senators and ask them to SUPPORT the current law and ensure that the Federal Reserve's rules move forward.
To learn more about the bill and to send a customizable letter to your elected officials, please click here.