WASHINGTON – Yesterday, House Financial Services Chairman Jeb Hensarling (R-TX) released a discussion draft of his Financial CHOICE Act, which includes language to repeal debit swipe fee reform. Hensarling introduced similar legislation last Congress and his renewed efforts to repeal debit reform have been endorsed by the credit card and banking industry.
The convenience store industry fought hard to achieve the debit reforms which passed as part of the Dodd-Frank legislation in 2010. The reforms, often referred to as the Durbin Amendment, injected competition into the debit swipe fee market by limiting the fees that Visa and MasterCard can fix on behalf of the largest banks. The reforms are designed to incentivize those banks to compete instead of accepting the price-fixed fees by Visa and MasterCard. The reforms also restored routing competition by requiring there be two unaffiliated routing network options on a debit card. This prevents Visa and MasterCard from blocking competitors from being on debit cards.
By restoring competition to the broken debit cards market, debit reform provided needed relief for retailers and consumers alike. A study by economist Robert Shapiro demonstrates that consumers have saved $30 billion since reform came into effect and 37,000 jobs were supported in the first year alone.
Repeal of debit reform would result in even higher swipe fees for merchants and increase the prices consumers pay for goods and services. For this reason, NACS, along with other members of the Merchants Payments Coalition, are strongly advocating for the repeal provision to be taken out of the Financial CHOICE Act and will oppose that bill as long as it includes repeal.
Last month, this message resonated with lawmakers on Capitol Hill during the NACS Government Relations Conference when 120 retailers, suppliers, and industry stakeholders met with more than 215 Members of Congress and asked them to keep debit reform intact. NACS continues to educate lawmakers on the importance of these reforms through its advocacy and grassroots efforts.
Hensarling plans to hold a hearing in the Financial Services Committee on the discussion draft of the Financial Choice Act on April 26.
Stay tuned to the NACS Daily for more information.