Bill to Delay Debit Swipe Fee Reform Means Banks Will Continue to Rake In Billions of Dollars in Fees

ARLINGTON, VA — March 15, 2011 — The Food Marketing Institute (FMI) is extremely disappointed by a bill introduced today by U.S. Senator Jon Tester (D-MT) to delay needed swipe fee reforms for two years.

     Congress included a provision in the financial regulatory reform law passed last year that would set reasonable constraints on the amount banks could charge retailers for processing debit card payments. The Federal Reserve is expected to finalize its proposed rules for implementing the provision in April.

     Grocers in Sen. Tester’s home state voiced their concerns about delaying the critical reforms.

     “We invite our friend Senator Jon Tester to visit Mike’s Thriftway in Chester, Montana where he and Sharla have shopped many times. We will open our books to him to show him what it is like to run a grocery store where the bank makes twice as much on an order as we do and the customer pays too much at a time when they don’t have any extra to pay,” said Mike Novak, who operates the store with his wife, Margaret.

Mike’s Thriftway is a member of FMI.

Sen. Tester claims he is concerned about small banks being hurt by the rules. Small grocery stores are already being hurt by the current system: non-negotiable fees they have to accept if they want to provide customers the option to pay with a debit card.

“Interfering with the process even before the final rule is written is nothing more than pandering to the giant banks,” said Jennifer Hatcher, senior vice president of government and public affairs at FMI. “Delaying swipe fee reform has consequences that will cost merchants and their customers $1 billion each month and will cost our economy 95,000 much-needed jobs each year. Killing jobs isn’t what we were promised in November.”