Sen. Lindsey Graham (R-SC) said yesterday that figuring out how to treat the oil sector in a carbon-control bill is still a problem. Some on Capitol Hill say it could push back Monday's expected unveiling of a compromise measure being offered by Graham, Sens. John Kerry (D-MA) and Joe Lieberman (D-CT), a sector-by-sector plan to lower U.S. greenhouse gas emissions.
The idea of a linked fee on oil and gas companies, which would be tied to the carbon market price other industries would pay under a cap-and-trade program, is dead, according to Graham. He had promoted the linked fee approach initially suggested by ConocoPhillips, BP America and ExxonMobil.
"The linked fee has got to be a gas tax in some weird way, and no, we're [not] going to do that," he said, adding that the senators also are not going to propose a gas tax increase. Other alternatives are being explored to figure out an acceptable way to bring the oil and gas industry into the mix of climate reform. Graham is seeking a little more time to work on the bill beyond Monday's expected rollout.
NACS Staff Contact: John Eichberger
Democrats on the Senate Agriculture Committee passed draft legislation authored by Chairwoman Blanche Lincoln (D-AR) dealing with the derivatives market. The bill passed by a vote of 13-8 with the help of one Republican, Sen. Charles Grassley (R-IA). This reform will be including in as one of the pieces in Wall Street regulatory overhaul legislation.
The bill is aimed at shedding light on over-the-counter (OTC) derivatives trading. It would force most derivatives trades, which are generally conducted directly between two parties and with little oversight, through third-party clearinghouses which will guarantee the swap and to be traded on open exchanges with price transparency.
NACS is engaged with the Commodities Market Oversight Coalition (CMOC) in support of the legislation and has signed several letters to Congress advocating careful oversight of the markets. We are most concerned with ensuring adequate transparency in the market to prevent manipulation.
NACS Staff Contact: John Eichberger
The House Judiciary Committee will hold a hearing on H.R. 2695, the Credit Card Fair Fee Act on Wednesday, April 28. The legislation would grant the retail community with a limited exemption from anti-trust laws, enabling them to join together to negotiate with Visa and MasterCard regarding rates and terms of acceptance. Chairman John Conyers (D-MI), the champion of the bill, will have the committee hear from retailers, consumer groups and the credit card companies. NACS applauds Chairman Conyers for his attention to this issue.
Historically, Visa and MasterCard operated as joint ventures of banks and they each separately provide a central point for their member banks to fix the price of these fees. Visa and MasterCard have such strong market power that retailers cannot refuse to take credit cards because they will lose customers. The fees take their toll both on consumers - who pay more for goods and services to help cover the fees - and retailers - who often must absorb a large part of these fees. On some transactions, these fees can be larger than the retailer's profit margin.
Details regarding a webcast of the hearing will be available next week.
NACS Staff Contact: Lyle Beckwith
California officials are probing rising credit card interchange fees. State Assemblyman Pedro Nava (D-Santa Barbara) and the Assembly Banking and Finance Committee are investigating interchange fees that credit card companies charge businesses and consumers in the course of transactions.
"California consumers and businesses are being taken to the cleaners to the tune of $5 billion dollars," said Nava. "Wall Street banks are holding us hostage and something must be done to return this money to struggling small businesses and consumers."
State interest in the cost of swipe fees has gained considerable momentum in the last few weeks. Just recently Vermont, Georgia and Colorado have had debates on the issue.
California Retailers Association President Bill Dombrowski said: "Most consumers don't know that every time they swipe a credit card, they help drive up the cost of consumer goods. This particularly impacts consumers who don't have or use credit cards because Visa and MasterCard rules effectively require that everyone pay the credit card price even if they are paying with cash, check, debit card or even food stamps."
Stay tuned for developments on all fronts of the interchange battle. Lawmakers across the country are starting to understand that in these tough economic times, transparency and free markets are imperative for businesses to survive and for consumers to get back on their feet.
NACS Staff Contact: Lyle Beckwith