National Restaurant Association Urges Congress to Pass Financial Services Reform Bill

In a letter sent to members of Congress today, the National Restaurant Association urged support for the Wall Street Reform and Consumer Protection Act (H.R. 4173). The bill includes several provisions that are important to the restaurant industry, including interchange "swipe" fee reforms. 

"The National Restaurant Association has been a vocal advocate for fairer transaction fees, and we are pleased with the interchange fee reforms included in the bill," said Scott DeFife, Executive Vice President of Policy & Government Affairs for the National Restaurant Association. "The Association's grassroots efforts were critical to this provision being included in the legislation. Our members highlighted this issue during our Public Affairs Conference in April, and continued to make contact with Capitol Hill in recent weeks urging action. The Association together with more than 30 state restaurant association partners have joined in repeated outreach to the House and Senate to press for adoption of the Durbin Amendment." 

The bill makes simple, common-sense reforms that address problems associated with debit card interchange or “swipe fees” and restrictions on payments made with credit cards. First, the Federal Reserve would have the authority to develop regulations ensuring that swipe fees imposed on debit card transactions are “reasonable and proportional” to the cost incurred in processing the transaction. Such fees are a growing expense for restaurants, and are the third highest cost for most establishments, usually following only labor and food expenses. Second, the bill would prohibit restrictions on discounts and allow merchants to set a $10 minimum transaction level for credit cards. Under current rules, any business, charity or government agency that accepts credit or debit cards is prohibited from setting a minimum transaction level even though the business may actually lose money on the sale because of slim profit margins. Language will also allow businesses to offer certain discounts to consumers for the use of certain forms of payment, directly passing on the savings from this amendment to the public. 

Two other issues are important to the restaurant industry and favorably decided in conference includes a bipartisan provision agreed to during Senate consideration, which recognizes the unique qualities of the small business sector. The provision requires the Consumer Financial Protection Bureau (CFPB) to include a review and recommendations from a small business advocacy review panel of any proposed rules that will significantly impact small firms. The amendment also requires the CFPB to inform the public of how its rules impact small business access to credit. Many restaurateurs continue to report difficulty accessing credit as a result of the financial and credit market crisis, which in turn limits their ability to expand operations, retrofit buildings and create jobs. 

The Association also worked in coalition with other industries against language included in the House-passed bill that would have granted enhanced and expedited regulatory authority to the Federal Trade Commission (FTC). The language, now stricken from the bill, would have allowed the FTC to quickly write rules directed at the restaurant industry with no procedural safeguards and with potential multi-million dollar civil penalties.