WASHINGTON — In a statement submitted to the House Judiciary Committee, the American Bankers Association urged Congress to oppose the Credit Card Fair Fee Act of 2008, H.R. 5546, which would curtail the amount credit card companies could charge merchants for the right to process transactions using their cards.
ABA stated that the bill unreasonably interferes with the electronic payment system and represents an effort by the merchant community to have government reduce their cost of doing business at the expense of increased costs and reduced benefits for everyday consumers.
"The bill puts in place a new government bureaucracy — a panel of three government-appointed lawyers — to arbitrarily decide rates and terms for interchange fees and the electronic payments system," the association says in its statement. "This interjects government price controls and interference into a smoothly functioning payment system that works to the benefit of consumers, merchants, community banks and the economy."
The ABA also released a statement responding to a report issued by the Government Accountability Office on interchange fees paid by federal entities.
"Most importantly, the GAO report concludes that while data on the effects of interchange-price controls attempted by other nations is limited, in some cases — particularly Australia — the result has been reduced costs for merchants but increased costs for consumers," the statement reads. "In fact, a recent report issued by the Reserve Bank of Australia states that there is no concrete evidence that merchants have passed on their cost savings to consumers in the form of lower prices."
