The National Retail Federation said legislation introduced today to delay swipe fee reform scheduled to go into effect this summer would block retailers from giving discounts to consumers who use debit cards and would cost merchants and the public more than $1 billion per month.

“We are extremely surprised to see a bill introduced that favors Wall Street banks and price-fixing card companies over Main Street merchants and their customers,” NRF Senior Vice President and General Counsel Mallory Duncan said. “Merchants are ready to pass lower swipe fees along to consumers in the form of discounts and other benefits as soon as reform goes into effect in July but we can’t do that if Congress lets bankers stand in the way.”

“The banks and card companies claim they want to study swipe fee reform but the truth is they want to kill it,” Duncan said. “Congress has already conducted more than half a dozen hearings on this issue, and the GAO and Federal Reserve have done studies of their own. The time for study is over. The time to reduce these fees and take bankers’ hands out of consumers’ pockets has come.”

Senator John Tester, D-Va., today introduced the Debit Interchange Fee Study Act of 2011, which would postpone swipe fee reductions included in last year’s Dodd-Frank Wall Street Reform and Consumer Protection Act by two years and require a study of the issue. Meanwhile, some members of the House Financial Services Committee are reportedly planning to introduce a bill calling for a one-year delay and a study.

Regulations proposed by the Federal Reserve in December to implement Dodd-Frank would lower debit card swipe fees from their current level of 1 to 2 percent of each transaction to a flat fee of no more than 12 cents per transaction for large banks that adhere to fees set by the card companies. Banks that set their own rates would be free to charge any fee they believe the market would bear. The move would reduce the current $20 billion a year in debit swipe fees by about 70 percent, or $1.2 billion a month. The Fed is scheduled to issue a final version of the regulations in April and the reforms are set to take effect in July.

Merchants are making a wide variety of plans to pass the savings along to customers who use debit cards, ranging from discounted prices to benefits and increased services such as free delivery at an appliance store, but would be unable to do so if reform is delayed. Some of the moves, such as hiring more sales associates to help customers, could result in significant job creation.

The banking industry is fighting to have swipe fee reform delayed or repealed, claiming among other things that mid-sized and small banks would be harmed by the reduction in fees. In fact, banks with less than $10 billion in assets are exempt and will still be able to charge current high fees.

NRF filed comments with the Fed in February arguing that the 12-cent cap doesn’t go far enough. NRF told officials debit cards are merely plastic checks and should be honored at or close to face value since paper checks that draw on the same accounts are not subject to swipe fees. Banks’ own filings with the Fed claim only 4 cents as the cost of processing a debit transaction.

As the world's largest retail trade association and the voice of retail worldwide, NRF's global membership includes retailers of all sizes, formats and channels of distribution as well as chain restaurants and industry partners from the United States and more than 45 countries abroad. In the United States, NRF represents the breadth and diversity of an industry with more than 1.6 million American companies that employ nearly 25 million workers and generated 2009 sales of $2.4 trillion. www.nrf.com

www.nrf.com/swipefees