ALEXANDRIA, Va. — The National Association of Chain Drug Stores and the National Community Pharmacists Association on Tuesday urged Congress to permit the Federal Reserve Board to expedite the implementation of an amendment to the financial-reform legislation from Sen. Dick Durbin, D-Ill., that would limit the fees charged to retail merchants on debit card transactions (known as “swipe fees”) to a level that is “reasonable and proportionate” to the costs incurred by the banks and credit card associations to process these transactions.
“The amendment also allows retail merchants options on how their debit card transactions are routed for processing, which provides market competition for this part of the process,” the letter stated.
Durbin’s amendment was included in the financial-reform legislation enacted last year, and directed the Federal Reserve to seek a level playing field between financial institutions and retailers — including pharmacies — on these debit card fees.
The law requires the Federal Reserve to write rules to enforce the “reasonable and proportional to cost” requirement by July 2011, although the precise date for enforcing the routing rule is left to its discretion. At this point, the Federal Reserve has issued draft regulations on what is to be considered reasonable and proportionate, and has closed the comment period on the rules.
“We believe it is imperative that this process of writing and issuing final regulations continue as required by the law," the letter from the NACDS and NCPA stated. "Debit and credit card interchange fees currently total close to $50 billion annually for retailers. The timely promulgation and enforcement of the regulations will assure the beginnings of reform for both debit and credit cards to assure that fees are ‘reasonable and proportionate’ for retailers and the customers they serve in a highly competitive marketplace.”
For a copy of the letter, click here.