Hearing Of The House Committee On Financial Services - H.R. 2382, The Credit Card Interchange Fees Act Of 2009 And H.R. 3639, The Expedited Card Reform For Consumers Act Of 2009

Statement

Hearing Of The House Committee On Financial Services - H.R. 2382, The Credit Card Interchange Fees Act Of 2009 And H.R. 3639, The Expedited Card Reform For Consumers Act Of 2009

Thank you, Mr. Chairman and thank you for arranging this
hearing. We are in the midst a recession, one that is battering consumers
and crippling small businesses. Many merchants are seeing their credit
being cut and their revenues being reduced. These businesspersons are
working as hard as possible to control their costs and keep their
companies operating.

One cost businesses cannot control, however, is interchange fees.
These fees, which are paid to banks and credit card networks such as
Visa and Mastercard, are charged to merchants every time a consumer
uses a credit card.
Interchange fees started as a business expense, but have grown into
a $50 billion revenue stream for banks and credit card networks alike.
At the same time, local businesses have seen their profits nose dive.
Interchange fees have become one of the highest costs of business, and
currently exceed the amount that retailers spend on energy and health
care costs.
Congress needs to address how the principles of fairness and
consumer protection are practiced, and how we balance the interests of
private business needs against overly burdensome fees. Merchants and
small businesses everywhere need our help.
Today's hearing will also address a problem that has surfaced since
we passed the Credit CARD Act into law. In anticipation of tougher
consumer protection standards, some banks such as Wells Fargo, have
publicly announced plans to penalize consumers by raising their interest
rates before the Credit CARD law can go into effect. Pushing this law's
effective date up to December will end these practices.
Thank you Mr. Chairman, I yield back the balance of my time.

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