US senator seeks credit card fee plan in bank bill

By Kevin Drawbaugh

WASHINGTON, May 5 (BestGrowthStock) – The No. 2 Democrat in the
U.S. Senate said on Wednesday he will push to amend a massive
Wall Street reform bill with a measure addressing credit card
fees affecting retailers.

So-called “interchange” fees are charged to supermarkets,
convenience stores and other merchants by firms such as Visa
(V.N: ) and MasterCard (MA.N: ) every time a customer uses a credit
card. Fees totaled $48 billion in 2008, up from $42 billion in
2007.

“We’re going to have a bill that addresses the interchange
fee and try to bring some fairness to it,” Senator Richard
Durbin said in remarks on the Senate floor. “This is one of the
major concerns of retailers and businesses.

“We’re not saying there shouldn’t be an interchange fee,”
he added. “We’re saying it should be reasonable.”

Analysts say they do not expect Durbin’s proposal to be
approved this year, but a wave of public anger at the financial
industry is giving momentum to proposals in Congress to crack
down hard on banks and capital markets.

Fears of changes to interchange fees have recently hurt
shares of Visa and MasterCard, Sanford C. Bernstein analyst Rod
Bourgeois said on Monday. A congressional hearing on the issue
was held last week, adding to those fears.

Three amendments affecting interchange fees, including
Durbin’s, are under discussion in Congress, said Concept
Capital policy analyst Jaret Seiberg.

“The danger here is that these amendments open the door to
future interchange legislation or regulation. So we see the
industry fighting to derail these provisions,” he said.

Durbin’s proposal would let merchants give discounts to
customers who use one type of credit card over another, or who
pay by cash or some means other than by credit card. They could
also set minimum purchase levels for using a credit card.

“The measure is relatively benign, which means it will be
hard to defeat … This is the amendment to watch,” Seiberg
said in a research report.

Stock Market Report

(Editing by Dan Grebler)

US senator seeks credit card fee plan in bank bill