WASHINGTON – Today, the House Financial Services Committee begins discussions about wiping out debit card reform as part of House Financial Services Chairman Jeb Hensarling’s (R-TX) Financial CHOICE Act legislation. NACS Chairman Rahim Budhwani, CEO at Encore Franchises LLC, explained why that’s a bad idea in an op-ed that ran in The Hill. Here’s a short excerpt from that article:

“Reform brought modest competition to this unfair, fixed market. By limiting how high Visa and MasterCard can price-fix swipe fees, Congress gave banks incentives to compete: If the banks simply set their own prices, they don’t have any limits on how much they can charge.

“Reform is working. Not only have consumers saved that $30 billion, but one bank has started setting its own fees and competing. Hopefully, others will follow suit.

“If Congress repeals these reforms now, none of the banks will have any incentive to compete on price and the move toward a free market will stop in its tracks….

“Merchants, meanwhile, unlike the banks, survive in a fiercely competitive world where they must hold down prices to survive. And an economist’s study of the first year of reform showed they did just that: Consumers saved $6 billion that year alone from reform, and it’s likely that amount has grown in the five years since reform has been in effect….

“Most retailers are small businesses, the backbone of our economy and big creators of jobs. And it’s no secret retailers are facing hard times these days with the transition from brick-and-mortar stores to the Internet, changing tastes and, of course, intense competition.

“Why should we add even more burdens in the form of high debit swipe fees by bringing back price-fixing? Retailers aren’t asking for a leg up with debit reform. We’re simply asking that swipe fees conform to the same free-market principles as the rest of our economy.”