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The Law And Economics Of Interchange

The Subcommittee on Commerce, Trade, and Consumer Protection of the House Committee on Energy and Commerce is holding a hearing today on "The Law and Economics of Interchange" (includes links to PDF's of the testimony provided at today's hearing).

The Merchant Payments Coalition said yesterday that it welcomed plans to hold a congressional hearing this week on this subject.

"Consumers already know about a lot of the charges they're charged by credit card companies," MPC Chairman Mallory Duncan, senior vice president and general counsel at the National Retail Federation, said. "They know about the interest they pay and the late charges and the over-limit charges and all the other charges credit card companies seem to charge just because they can. What they don't know is that credit card companies are charging them a secret checkout charge every time they use their cards. This hearing is going to help bring that secret charge into the spotlight and let consumers know just how much money credit card companies are taking out of their pockets behind their backs."

"Credit card interchange charges are a top concern for U.S. convenience and petroleum retailers and a diverse coalition of merchants," National Association of Convenience Stores President and CEO Henry O. Armour said. "There has not been nearly enough information and discussion about these charges in the past, so this hearing is an important step toward informing Congress and the public about the impact that high interchange rates have on U.S. consumers."

Separately, the Association for Financial Professionals also commented on the hearing:
"As both credit and debit card usage continues to increase, members of the Association for Financial Professionals (AFP) are growing more concerned about interchange. Our October 2005 survey (PDF) raised serious questions about the competitiveness of the credit card marketplace, an increasingly important part of the U. S. payment system", said Jim Kaitz, AFP's President. "AFP supports policies and practices that promote fairness and competition in the major components of our financial system and our survey highlights the need for further scrutiny in this area," Kaitz concluded.

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