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0 Comments | Daily Mail (London, England), The, Nov 14, 2009

Byline: Platell’s People

WITH her flirty little black dress, manicured nails and immaculate make-up, Coleen Rooney was a picture of happiness — out on the town for the first time since baby Kai was born just ten days previously. But isn’t it a little sad that a new mother can’t sit on her nest for a few days without the urge to doll up and go partying, no doubt with an eye to the millions she’ll make out of her ‘miracle baby weight loss’ programme. It was nice when mums were content with the miracle of motherhood.

Business Wire, Nov 19, 2009

WASHINGTON — The National Retail Federation welcomed a report issued today by the
General Accountability Office on the $48 billion in swipe fees that
credit card companies collect from merchants and their customers each
year.

This report shines a spotlight on credit card fees and their cost to
consumers, NRF Senior Vice President and General Counsel Mallory Duncan
said. In the past two weeks weve seen the Federal Reserve Bank of
Kansas City hold a major conference on credit cards, a study from the
Hispanic Institute on how card companies take from the poor and give to
the rich, and now this document. Clearly, there is a growing focus on
this issue and its time for action. With this information in hand, we
hope Congress will move quickly to pass legislation to bring these fees
and practices under control.

This report confirms what we have been saying about swipe fees for
years that they drive up costs for consumers and are a cash cow for
banks, Duncan said.

The GAO today issued a 64-page report on credit card interchange fees
that resulted from a study ordered by Congress as part of the Credit
Card Accountability, Responsibility and Disclosure Act reform bill
signed into law in May. The study addressed issues such as disclosure of
interchange fees to consumers, the extent to which the fees drive up
prices for consumers, the card industrys refusal to negotiate over the
fees, how much money generated by the fees goes to marketing programs
such as travel miles, and ways in which card company contracts block
merchants from giving discounts to customers who pay by cash.

Among other conclusions, the GAO found that interchange rates have risen
despite Visa and MasterCard claims that they have remained fairly
constant, that interchange fees drive up prices for consumers, and that
consumers could see lower prices if the fees were reduced.

Interchange is a fee averaging 2 percent that Visa and MasterCard banks
charge merchants each time one of their credit cards is swiped to pay
for a purchase. The credit card industrys interchange or swipe fee
revenue has tripled from the $16 billion collected when NRF began
tracking the fees in 2001 to $48 billion last year. Visa and MasterCard
rules effectively force merchants to pass the fees on to consumers by
requiring them to be included in the advertised price of merchandise and
making cash discounts difficult. As a result, the average household paid
an estimated $427 in higher prices last year, up from $159 in 2001.

NRF testified before the House Financial Services Committee last month
that credit card companies are in an arms race to increase interchange
revenue by switching many customers from ordinary cards that carry fees
as low as about 1.5 percent to gold and platinum cards that offer
rewards like travel miles or concierge services but charge 3 percent or
more. The industry has also introduced cards into traditionally all-cash
areas such as taxi cabs and fast-food restaurants.

Three major bills that would address interchange are pending in
Congress. H.R. 2382, the Credit Card Interchange Act of 2009, sponsored
by Representative Peter Welch, D-Vt., would require card companies to
disclose interchange rates, terms and conditions, and would give the
Federal Trade Commission authority to review interchange and prohibit
any practices that violate consumer protection or anti-competition laws.
Merchants would be allowed to give cash discounts and set minimum card
purchase amounts, and could choose which cards to accept. The Credit
Card Fair Fee Act, sponsored in the House as H.R. 2695 by Judiciary
Committee Chairman John Conyers, D-Mich., and in the Senate as S. 1212
by Majority Whip Richard Durbin, D-Ill., would require Visa and
MasterCard banks to negotiate over interchange fees rather than continue
to impose them on merchants on a take-it-or-leave-it basis. If an
agreement could not be reached, the Durbin bill would require both sides
to submit their final offers to binding arbitration by a three-judge
panel appointed by the Department of Justice and FTC
online credit card service