State governments back creditors on interchange fee regulations
The treasurers of eight U.S. states are considering writing a letter to Congress arguing against an amendment to the omnibus financial reform bill that would place strict limits on the size of the fee credit card issuers can levy on merchants using their services, according to the Washington Post.
Some state programs are distributed via credit and debit cards, and Nebraska state treasurer Shane Osborn told the newspaper that “the cost savings achieved as a result of moving from check to electronic distribution of benefits are significant to states and their taxpayers. [The] amendment will drastically alter this equation.”
Senator Richard Durbin, the amendment’s sponsor, had responded angrily to recent assertions from the credit card companies that merchants would be the ones penalized by the restrictions on interchange fees, accusing Visa and MasterCard of “bullying” tactics.
The Washington Post also reports that the sponsor of a similar bill in the House of Representatives, Congressman Peter Welch, said that “[Visa and MasterCard are] throwing everything they can at this to hang on to their pricing power.”