News Room

Food Retailers Charge Bank Task Force Is Hidden Forum to Fix Prices In Effort to Assess New Electronic Transaction Fees

April 4, 2002
Washington, DC — April 4, 2002 — Using a “hidden forum,” a group of banks is conspiring to assess new transaction fees that could cost retailers and their customers untold millions of dollars a year, according to the Food Marketing Institute (FMI) in a letter sent today to the National Automated Clearing House Association (NACHA).

The fees would be assessed on electronic ACH transactions, which numbered 6.9 billion in 2000 and were worth $20.3 trillion, according to NACHA data. In the letter, FMI President and CEO Tim Hammonds said, “I write to express our grave concerns about NACHA’s recently established Interbank Compensation Task Force. It appears the task force was created to . . . impose interchange fees for ACH transactions, including consumer electronic bill paying and check clearing.”

The task force, Hammonds wrote, “is composed entirely of bank executives, and provides a hidden forum for these competitors to negotiate the terms of a price-fixing arrangement. We are surprised that NACHA would allow itself to be a party to such a clearly anticompetitive activity. The impact on retailers and consumers will be severe.”

He went on to say, “The task force is on its face little more than a forum for price-fixing. As such, it exposes NACHA and participating firms to liability under the Sherman Act. . . . We urge you to take immediate steps to disband the task force in order to avoid future liability.”

Food Marketing Institute proudly advocates on behalf of the food retail industry. FMI’s U.S. members operate nearly 40,000 retail food stores and 25,000 pharmacies, representing a combined annual sales volume of almost $770 billion. Through programs in public affairs, food safety, research, education and industry relations, FMI offers resources and provides valuable benefits to more than 1,225 food retail and wholesale member companies in the United States and around the world. FMI membership covers the spectrum of diverse venues where food is sold, including single owner grocery stores, large multi-store supermarket chains and mixed retail stores. For more information, visit www.fmi.org and for information regarding the FMI foundation, visit www.fmifoundation.org

###