ALEXANDRIA, VA — Lyle Beckwith, Senior Vice President of Government Relations of the National Association of Convenience Stores (NACS), today issued the following statement on the House Financial Services Committee hearing on the Financial Choice Act which would repeal debit swipe fee reform:
“NACS strongly opposes the Financial Choice Act as long as it includes a provision to repeal debit swipe fee reform. Reforms have saved consumers $30 billion and created tens of thousands of jobs.
“The proposed repeal would raise costs for and dampen job-creating investment by small businesses and drive up prices for consumers, while generating even greater profits for the giant banks who already benefit from the highest swipe fees in the world, even with reform in place.
“Here is the simple truth: Repeal of debit reform would take savings out of the hands of consumers and line the pockets of the largest banks and the two network giants—Visa and MasterCard— restoring their monopoly power to price-fix fees. Destroying competition in this way hurts small businesses and consumers—dramatically increasing costs for convenience store owners, for whom swipe fees are already, on average, their fastest-growing expense, and quickly wiping out the $30 billion in savings consumers have experienced thanks to the reform.
“The potential harm to competition, consumers and small business to benefit the credit-card Goliaths is the reason repeated attempts to repeal swipe fee reform have failed. And it’s why, once again, NACS will keep doing everything in our power to build on the strong opposition to repeal and ensure that Members of Congress recognize the success of this vital reform in establishing competition in the debit-card market.”
Debit swipe fee reform was enacted in 2010 as part of the Dodd-Frank Wall Street reform package. The provision ensured competition among debit networks and gave banks incentives to compete on the swipe fees they charge merchants rather than all charging the same price-fixed fees.
According to a report by economist Robert Shapiro, reductions in debit fees driven by swipe fee reform put $6 billion in consumers’ hands through lower prices and created more than 37,000 new jobs in the first year alone that the reforms were in place. In addition, small merchants have benefited from greater transparency in debit-card transactions.