Kansas City Fed International Payments Policy Conference on Interchange Fees
Lloyd Constantine, chairman of law firm Constantine Cannon, was a featured speaker last week at the International Payments Policy Conference "Interchange Fees in Credit and Debit Card Industries: What Role for Public Authorities?" held in Santa Fe by the Payments System Research Department of the Federal Reserve Bank of Kansas City.
Constantine's speech titled "The Need for Federal Reserve and Antitrust Intervention in the Failed U.S. Debit and Credit Markets" is available online (PDF) on his firm's website.
Three things stand in the way of ending this cartel mechanism, which extorts billions of dollars annual from U.S. merchants and consumers, through supra-competitive credit card interchange fees.MasterCard's Noah Hanft was also a keynote speaker at the conference -- the day after Constantine's speech -- and responded in his speech "Let's Get Real!" (PDF):These three things are the now thoroughly discredited Nabanco decision, the two-sided market argument being prepared for imminent litigation, and the still unknown resolve of a public or private enforcer of the antitrust laws to forcefully and skillfully litigate this price-fixing case.
Ladies and gentlemen, it’s not really about high interchange fees, it’s really about high attorney’s fees. Yesterday, we all heard from one class action lawyer who is articulate and well spoken. But make no mistake about it, he and his fellow class action lawyers appeal for clients so that they can extract enormous fees for themselves and their colleagues. His speech vividly demonstrates that at bottom it is not about economic theories. It is not about market realities. It is about pure and simple – money-lust.He went on to close with:
I conclude my remarks today with a message to those class action lawyers, and economists that are in that perverse boutique making their living vilifying interchange. It is very simple message. Stop trying to grow your hidden tax! Find something else to do with your time.Additional presentations available on the conference's home page include (all PDF):MasterCard provides an incredible service to the global community. It is one that is cherished by consumers – it should be celebrated, not regulated.
- Interchange Fees in Various Countries: Developments and Determinants
- Economic Rational for Interchange Fees
- Public policy and the invisible price: competition law, regulation and the interchange fee
- Payments System Reform: The Australian Experience
- Interchange in a changing market: Observations from the euro area perspective
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