Restaurants, Retailers Also Fighting to Save Interchange Rule (Misc News: May 3, 2011)
While credit unions and other financial institutions are working hard to get the debit interchange provision of Dodd-Frank delayed or overturned, retailers and restaurants are working just as hard to make sure it takes effect.
Members of the Michigan Restaurant Association had a press conference in downtown Lansing Monday to support the law. Restaurant owners and other retailers argue that debit interchange charges slice into already paper-thin profit margins and affect their bottom line and ability to hire employees.
"It's hard enough for restaurants to make a go of it in this economy, let alone when they're strangled by excessive swipe fees," MRA Vice President of Public Affairs Andy Deloney, said, according to the MIRS news service.
A 12-cents-per-transaction cap was passed last year as part of the Wall Street reform and Consumer Protection Act and is scheduled to take effect July 21. However, banks, credit unions and credit card companies are lobbying Congress to delay the cap, which is why the state's restaurant association had the news conference.
"Sure, banks and credit card companies need their 'take' for processing debit card transactions, but when that fee is 10 times more than what it actually costs, that's robbery," said Tom Vonachen, owner of Downtown Subs & Salad in Lansing, which was the site of the news conference.
Grand Ledge High School student Andrew Myszak, who works for the school's Comet Connection Store, claims in a Lansing State Journal article that his research shows that the store ends up losing as much as 82 cents when it accepts debit cards for items such as a $1 iced tea.
"To make profit, we'd have to put a $5 minimum on our machine, which would breach the contract with the credit card company," said Myszak, 18, who takes care of the accounting for Grand Ledge High School's Comet Connection Store.
The Grand Ledge students brought in nearly 100 letters written by fellow students to U.S. Sen. Debbie Stabenow, D-Lansing, urging her to support the cap. They planned to deliver them to Stabenow's East Lansing office.
Stabenow voted for the amendment that put the cap language in the legislation. Stabenow's Washington, D.C., office declined to comment on the issue when contacted by MIRS, but she has previously said that she is studying the issue.