Swipe-Fee Disclosures, Antitrust Pressure Likely Following Senate Hearing
As anticipated, bankers and card networks squared off with merchants at today’s Senate Judiciary hearing addressing credit-card interchange fees. Chairman Durbin (D-IL) strongly defended his amendment restricting debit-card fees, arguing that expanding fee constraints and network-competition provisions to credit cards would reduce inflation and increase consumer spending power. He did not, however, propose legislation to do so, instead pressing for transparency; we expect the CFPB to include a mandate for swipe-fee disclosures in the changes it plans shortly to propose to current card disclosure requirements (see Client Report CONSUMER42). Ranking Member Grassley (R-IA) took an equivocal stance, suggesting that the key purpose of Judiciary review is to ensure competition and that additional attention may be needed in this sector. Sen. Klobuchar (D-MN), chair of the panel’s Antitrust Subcommittee, supported the need for tougher antitrust review but did not suggest that any Congressional initiatives to force this are under consideration. Indeed, no legislation to alter card fees or network restrictions was specifically proposed, but bipartisan criticism of current industry practice suggests a bill might advance if a vehicle for it can be found. Freestanding legislation would require Banking Committee action and there is not yet a sign that Chairman Brown (D-OH) intends to take this on.