VERMONT: A Taste Of Your "Financial Overhaul Bill"! (What?)
John Fartlington Snodnagel
Seems like the consumer is being rolled and keel-hauled!
====================
"Vermont limits swipe fees paid to credit card issuers"
By Ylan Q. Mui
Washington Post Staff Writer
Saturday, May 22, 2010; A10
VERMONT on Friday became the first state to pass legislation limiting
the swipe fee on credit and debit card purchases, a week after the
Senate approved a similar provision as part of the mammoth financial
overhaul bill.
The Vermont law targets the fee retailers must pay card issuers and
processors each time shoppers swipe a credit or debit card, which
typically ranges from 1 to 2 percent of the price of the purchase.
The law allows retailers to set a $10 minimum for credit and debit
card charges and to offer a discount to shoppers who pay with cash
starting Jan. 1.
Vermont lawmakers unanimously passed the legislation several weeks ago
and then sent it to Gov. Jim Douglas (D) for approval. On Friday,
Douglas said that he would not sign the bill but also would not veto
it, allowing it to become law without his signature.
In a statement, Douglas said he sympathized with merchants, who have
complained that the swipe fee can often eat up their profit on small
purchases. But he worried that consumers' ability to use their cards
would be restricted and that some card issuers and networks might
limit their services in the state as a result of the new law.
"I do not believe . . . that legislation of this nature is best
handled at the state level," Douglas said.
The Vermont law is the second big win for retailers this month on what
has long been one of their top political issues. Last week, the Senate
approved an amendment sponsored by Sen. Richard J. Durbin (D-Ill.)
that included similar provisions. In addition, it directed the Federal
Reserve to ensure that the fees are "reasonable and proportional" to
the costs incurred by the network that processes the card, typically
Visa or MasterCard. The Senate passed the financial overhaul bill that
includes the amendment Thursday, and now it must be reconciled with a
version passed by the House in December that does not address swipe
fees.
"What Vermont has done is a first step," said Mallory Duncan, general
counsel for the National Retail Federation, a trade group. "What the
Senate has done is a more important step, but it's not been completed,
yet."
Card issuers and processors say the Vermont law might help retailers
but could become a burden for consumers. Trish Wexler, a spokeswoman
for the Electronic Payments Coalition, which represents card issuers
and processors, said many state benefits such as unemployment checks
are delivered on prepaid cards. If retailers set minimums for using
cards, that could force some consumers to spend more money to meet the
bar.
"I suspect that you're going to see a lot of unhappy Vermont citizens
who can't use their cards the way that they want to," she said.
http://www.washingtonpost.com/wp-dyn/content/article/2010/05/21/AR2010052104872_Comments.html