The National Restaurant Association is voicing opposition to legislation introduced today that would delay critical reforms aimed at bringing greater competition and transparency to the swipe-fee market.
The bill, S. 575, would delay by two years reforms that are scheduled to take effect this summer. The National Restaurant Association-supported reforms would require banks to either compete on their debit card swipe fees or charge an amount that is “reasonable and proportional” to their transaction costs, as determined by the Federal Reserve.
“Delaying swipe fee reform would cost merchants and their customers an estimated $1.3 billion each month – allowing Visa, MasterCard and the largest banks to continue to reap billions in fees and continue to raise fees, as they have done twice in the past year on the backs of the nation’s small businesses and American consumers,” said Scott DeFife, executive vice president for policy and government affairs at the National Restaurant Association.
Banks with assets under $10 billion are not covered under the new law. As a result, Visa recently issued a two-tiered pricing structure for debit card interchange fees, which allows small banks to charge less than large banks as envisioned under the new law.
“Dramatically increasing and excessive swipe fee charges have become the third largest cost of operating for many restaurateurs,” said DeFife. “As the nation’s No. 2 private-sector employer, the restaurant industry is still reeling from the effects of this challenging economic time. Delaying these much-needed reforms is unnecessary because of the development of the two-tiered pricing system and will stymie restaurant owners’ ability to create jobs.”
For more information, visit www.restaurant.org.