[WayTooHigh.com, editorial note: As gas prices double, so too must the bank profits from credit and debit card interchange fees, and then some, because consumers are more likely to charge when the cost to fill-up rises]
Interchange has been a contentious issue in the United States for more than a decade. But the issue has only recently captured the attention of lawmakers who are now debating interchange in the context of rising oil prices and price gouging accusations.
Energy legislation approved by the U.S. House and now awaiting consideration in the Senate, among other things would commission a Federal Trade Commission (FTC) study of price gouging at the gas pump, including an "analysis of the role and overall cost of credit card interchange rates on gasoline and diesel fuel retail prices."
The request was inserted in legislation taken up in the wake of Hurricane Katrina and the problems that ensued with domestic oil supplies. It was brought to the attention of Congress by the National Association of Convenience Stores (NACS), a Washington-area association that lobbies on behalf of convenience stores and service stations. NACS also is a party to current class-action litigation challenging Visa, MasterCard and several large banks on interchange pricing.
Congress, as a rule, doesn't meddle in things like bank pricing, unless, of course, there's a hue and cry from the public. Back in the early 1990s, with interest rates spiraling and bank credit card profits soaring, a debate occurred in Congress on legislation that addressed card fees, but no legislative mandates were issued.
That the current debate is being raised in the context of spiraling prices at the gas pump and allegations of price gouging by oil companies, however, and the fact that this is an election year, suggests that the pending request for an FTC study of credit card interchange might well be enacted.
It's only a preliminary step, of course, but the fact that the FTC might be called upon to look into credit card interchange suggests that the debate over card interchange won't be limited for much longer to the courts and convention panels.
[source: The Green Sheet, Inc., by Patti Murphy]
