retail news in context, analysis with attitude

Bloomberg reports that Federal Reserve Chairman Ben S. Bernanke told lawmakers “that the central bank would miss the April deadline for a rule capping debit-card ‘swipe’ fees, after receiving an ‘extraordinary volume’ of detailed comment letters on its preliminary proposal.”

As the story notes, “The Fed in December proposed capping debit-card interchange fees charged to merchants at 12 cents a transaction, compared with the current formula that averages 1.14 percent of the purchase price, or about 44 cents. The proposal, which may cut as much as $12 billion in revenue from large lenders like Bank of America Corp. (BAC) and JPMorgan Chase & Co. (JPM), set off a lobbying battle between banks and retailers.”

And, Bloomberg continues: “Bipartisan groups of Senate and House lawmakers this month proposed legislation to prevent the rule from taking effect July 21. Senator Jon Tester, a Montana Democrat and lead proponent of the Senate bill to delay the proposal for two years, said he’s concerned that an exemption for banks with assets of less than $10 billion would be ineffective. Retail groups who favor lower interchange fees said the delay indicates that the rulemaking process is working and should be allowed to continue.”
KC's View:
Retailers need to keep the pedal down on this one, and not let up the pressure on legislators. And they ought to enlist their shoppers to join the battle, explaining in clear and unambiguous terms how swipe fees hurt them.

It shouldn’t be a hard sell. After all, nobody likes or trusts bankers these days.