I know the free market is already riddled with regulation, so riddle me this...As long as options such as HomeATM are on the table, why on earth would anyone want our free market system crippled with government regulation? Nordstrom's Executive VP, Kevin Knight may have said it best when he told the Judiciary Committee in a letter that Nordstrom believes that interchange fees represent "a fair price for the services we receive," adding that "we prefer market competition to
regulation."John B. Frank, HomeATM PIN Debit Blog, Jul 2008

The biggest banks have put working families and the economy on a rollercoaster -- but regulators arent paying enough attention to make sure it doesnt go off the track, said Stephen Lerner, Director of the SEIU Private Equity Project. Lawmakers and regulators have to act before the fees and bad practices hurting consumers derail the economy altogether.

The abuse of American consumers and businesses by credit card companies and big banks needs to end, said John Motley, Senior Vice President, Government and Public Affairs of FMI. It is time for Congress to Act.

By combining the market power of all of the big banks, the credit card companies have the ability to dictate their terms to everyone, said Lyle Beckwith, Senior Vice President,Government Relations of NACS. They abuse businesses -- large and small -- in just the same ways they abuse individual cardholders. The ever-changing credit card terms and mystery fees hit everyone.

Credit card abuse is incredibly frustrating for our members, said Tom Wenning, Senior Vice President and General Counsel of N.G.A. They see how much money is taken out of their businesses in credit card fees and then they see the high rates and fees they get hit with as individual consumers. The credit card companies hit all of us twice -- and many people dont even know it.

Last year alone, banks made $42 billion in interchange fees. The top 10 banks issued 88 percent of the credit cards and made the vast majority of those fees. The biggest banks in the country have recently come under fire for abusive banking practices such as increasing credit card interest rates, high overdraft and late fees and rising costs of consumer products.

Members of Congress introduced bills that will help protect consumers and retailers from the banks and credit card companies continued abuses. Rep. Carolyn B. Maloney (D-NY), introduced The Credit Cardholders Bill of Rightson February 7, 2008; Rep. John Conyers (D-MI) and Rep. Chris Cannon (R-UT) introduced the Credit Card Fair Fee Acton March 6, 2008; Sen. Richard Durbin (D-IL) and Sen. Christopher Bond (R-MO) introduced the Senate companion to the Credit Card Fair Fee Acton June 5, 2008; and Rep. Peter Welch introduced the Credit Card Interchange Fees Act of 2008on June 11, 2008.

The text of the letter sent to the House of Representatives follows:

The biggest banks and credit card companies have used the power they wield in the marketplace to push unfair business practices that are costing our members -- retailers and working families -- tens of billions of dollars each year.

The credit card industry has moved steadily over the last several years to impose more burdensome penalties and fees on cardholders -- ratcheting up interest rates as high as 30 percent. At the same time, the industry has dramatically increased credit card interchange fee revenues. All banks charge the same schedule of fees which drives up the costs of nearly everything consumers buy, including necessities such as gasoline and food, and removes the competitive pressure to reduce the fees.

Each year, these banks flood our mailboxes with 9 billion pieces of junk mail promising cheap, easy credit. The banks then make all of us pay for these billions of offers -- without us even knowing it -- by using part of the more than $40 billion they collect annually in interchange fees. These fees are nominally paid between banks but are actually passed on to merchants and, ultimately, to consumers. These fees are tremendously regressive because credit card industry rules make sure they are hidden in the prices of goods and services so that cash shoppers have to pay for them just like premium rewards credit cardholders.

The federal agencies that are responsible for protecting American consumers from the credit card industrys worst abuses have failed to use their authority to stop the anticompetitive and deceptive and unfair practices that have become standard in the industry. It is now time for Congress to step in and begin to restore fairness in the financial marketplace for working families and merchants.

With that in mind, we urge you to support three pieces of legislation that would begin to reform this industry. These are: -- The Credit Cardholders Bill of Rights Act of 2008, H.R. 5244, sponsored by Rep. Carolyn Maloney (D-NY); -- The Credit Card Fair Fee Act of 2008, H.R. 5546, sponsored by Reps. John Conyers (D-MI) and Chris Cannon (R-UT) and S. 3086 sponsored by Senators Durbin (D-IL) and Bond (R-MO); and - The Credit Card Interchange Fees Act of 2008, H.R. 6248, sponsored by Rep. Peter Welch (D-VT).

These pieces of legislation are important steps forward in ending the abusive credit card practices that drain billions of dollars from working families and retailers each year. We urge you to support these bills and quickly pass them.

About the Organizations

SEIU
The Service Employees International Union (SEIU) is the fastest- growing labor union in North America, with 1.9 million members. Together with consumer advocacy organizations nationwide, were working to hold big banks accountable to working families and our communities.

FMI
Food Marketing Institute (FMI) conducts programs in public affairs, food safety, research, education and industry relations on behalf of its 1,500 member companies -- food retailers and wholesalers -- in the United States and around the world. FMI's U.S. members operate approximately 26,000 retail food stores and 14,000 pharmacies. Their combined annual sales volume of $680 billion represents three-quarters of all retail food store sales in the United States. FMI's retail membership is composed of large multi- store chains, regional firms and independent supermarkets. Its international membership includes 200 companies from more than 50 countries. FMI's associate members include the supplier partners of its retail and wholesale members.

NACS
NACS, the association for convenience and petroleum retailing, is an international trade association representing more than 2,200 retail and 1,800 supplier member companies. The U.S. convenience store industry, with over 146,000 stores across the country, posted $577.4 billion in total sales in 2007, with $408.9 billion in motor fuels sales.

N.G.A.
N.G.A. is the national trade association representing the retail and wholesale grocers that comprise the independent sector of the food distribution industry. An independent retailer is a privately owned or controlled food retail company operating a variety of formats. Most independent operators are serviced by wholesale distributors, while others may be partially or fully self- distributing. Some are publicly traded but with controlling shares held by the family and others are employee owned. Independents are the true entrepreneurs of the grocery industry and dedicated to their customers, associates, and communities. N.G.A. members include retail and wholesale grocers, state grocers associations, as well as manufacturers and service suppliers.