H.R. 5546, the so-called Credit Card Fair Fee Act is legislation seeking to grant a giant antitrust exemption to over 15 million retailers, harming consumers across the nation.
Background
The National Grange recently wrote to U.S. House of Representatives leaders expressing opposition to H.R. 5546. This legislation seeks an antitrust exemption for retailers allowing them to negotiate lower “interchange fees.” These fees are charged for the use of credit and debit cards at retail outlets. While the legislation is billed as an effort to find innovative ways to deliver relief to consumers struggling with high food and gas prices, the National Grange is concerned it will not accomplish its goals. In fact, the legislation could do considerable harm to consumers.
H.R. 5546 does not include provisions guaranteeing that consumers will benefit in any way should retailers succeed in negotiating lower interchange rates. Instead, the legislation seems to only guarantee higher profits for retailers by not requiring any savings to be passed on to consumers. Additionally, credit card services are a critical lifeline for community banks and credit unions that must compete against larger financial institutions. Congressional mandates enabling retailers to set interchange rates will likely result in many community banks and credit unions exiting the marketplace for these services.
Unfortunately, Congressional granting of antitrust exemptions to large numbers of horizontal competitors often invites collusion and other abuses which are hard to police and prosecute. By giving retailers the unilateral authority to set terms and conditions for retail credit, the National Grange is concerned that the legislation will limit the availability of such credit card services in many middle and low-income communities where the dollar volume of retail credit card transactions is lower.
While the National Grange applauds Congress’s continued concern about consumer interests, the fear is that H.R. 5546 represents a giant windfall for retailers and does nothing to protect consumers.
Grange Policy
Banking and Consumer Credit Law
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The National Grange urges state and federal banking regulators to better monitor fees charged by banks, reduce and eliminate those that are unfair, and provide customers with protection against aggressive banking business practices.
Antitrust and Monopoly
- The National Grange recommends that the federal antitrust laws be rigidly enforced.
Action Needed
Please e-mail your U.S. Representative urging them to vote against H.R. 5546, the Credit Card Fair Fee Act. Please feel free to cut and paste the following sample letter. If you do not know your Representative’s e-mail address please click here to find it.
Sample Email
Dear Congressman ____________,
I am writing to urge your opposition to H.R. 5546, the Credit Card Fair Fee Act. This legislation seeks an antitrust exemption for retailers allowing them to negotiate lower “interchange fees.” While the legislation is billed as an effort to find innovative ways to deliver relief to consumers struggling with high food and gas prices, the National Grange is concerned it will not accomplish its goals. In fact, the legislation could do considerable harm to consumers.
H.R. 5546 does not include provisions guaranteeing that consumers will benefit in any way should retailers succeed in negotiating lower interchange rates. Instead, the legislation seems to only guarantee higher profits for retailers by not requiring any savings to be passed on to consumers. Additionally, credit card services are a critical lifeline for community banks and credit unions that must compete against larger financial institutions. Congressional mandates enabling retailers to set interchange rates will likely result in many community banks and credit unions exiting the marketplace for these services.
Unfortunately, Congressional granting of antitrust exemptions to large numbers of horizontal competitors often invites collusion and other abuses which are hard to police and prosecute. By giving retailers the unilateral authority to set terms and conditions for retail credit, National Grange is concerned that the legislation will limit the availability of such credit card services in many middle and low-income communities where the dollar volume of retail credit card transactions is lower.
While I applaud Congress’s continued concern about consumer interests, my fear is that H.R. 5546 represents a giant windfall for retailers and does nothing to protect consumers.
Sincerely,
Your Name
Your Grange name and number
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If you have any questions or comments regarding this Action Alert, please contact Molly Thompson at mthompson@nationalgrange.org or by calling 1-888-4GRANGE.
Thank you for your grassroots participation in the National Grange Legislative Program.
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