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In advance of the October 8th hearing in the House Financial Services Committee on H.R. 2382, “The Credit Card Interchange Fees Act,” sponsored by Rep. Peter Welch (D-VT), the Electronic Payments Coalition has issued the following statement:

“H.R. 2382 is one of the most egregious assaults on consumer protection that this country has seen in some time. Disguised as a measure to allow for cash discounts - something that is already allowed by federal law and by all card network contracts - the bill would instead open up the door for bait-and-switch advertising schemes, charging additional checkout fees at the register, and discrimination against certain card holders. The bill is chock full of provisions that mean one thing: consumers will pay more so merchants can pay less. Bottom line - retailers don’t want to pay their fair share for a service that brings them more sales and higher profits - and want their customers to pick up the tab instead.”

The Electronic Payments Coalition released today a document detailing the anti-consumer protection measures detailed in H.R. 2382. This document follows this statement.

Rep. Peter Welch’s H.R. 2382 - “The Credit Card Interchange Fees Act” - would…
Leave consumers vulnerable and unprotected against deceptive, bait-and-switch advertising.

Rep. Welch’s legislation would eliminate important consumer protections on how merchants are allowed to advertise their prices - restrictions that are in place expressly to protect consumers. This would allow retailers to promise one low price, then charge more - potentially a lot more - when the customer reaches the cash register. Consumers would be left unprotected, forced to pay the demanded price regardless of what was advertised - and retailers would profit unjustly from their dishonest schemes.

Leave consumers stranded at the checkout counter.

Imagine getting to the front of a long line at the grocery store, only to discover that the store doesn’t accept your alma mater’s credit card. Or they won’t accept the card that donates a few cents of every purchase to your favorite charity. This legislation allows merchants to pick and choose which cards they will accept - and which cards they won’t - with no advance warning to their customers.

Dramatically reduce - or eliminate - the card rewards programs that are used by 80% of American households.

H.R. 2382 would prohibit card issuers from charging a slightly higher interchange rate for rewards cards - cards that are traditionally used by customers who are proven to spend more when they shop, in turn providing greater value to merchants. Unfortunately, merchants don’t want to pay for this benefit - and the result would be far fewer rewards for American consumers who value such programs. In fact, similar regulation in Australia has resulted in a 23% reduction in the value of rewards programs for consumers.

Force businesses to disclose highly confidential financial information to the public and to their competitors.

H.R. 2382 would require every contract, rate agreement, and rule on merchant discount rates to be submitted to the Federal Reserve, which would then be responsible for publishing every bit of it. This would involve literally millions of documents, most containing highly sensitive financial information. The chaos that would result from the sheer volume of contracts - not to mention the compromised financial information - would be incredibly harmful to retailers and to financial institutions.

source: Electronic Payments Coalition