Download April 4, 2017 Speaker Paul Ryan Minority Leader Nancy Pelosi

April 4, 2017
Speaker Paul Ryan
Speaker of the House of Representatives
H-232 The United States Capitol
Washington, DC 20515
Minority Leader Nancy Pelosi
House Democratic Leader
H-204 The United States Capitol
Washington, DC 20515
Majority Leader Kevin McCarthy
Majority Leader of the House of Representatives
H-107 The United States Capitol
Washington, DC 20515
House Minority Whip Steny Hoyer
House Democratic Whip
H-148 The United States Capitol
Washington, DC 20515
Dear Speaker Ryan, Minority Leader Pelosi, Majority Leader McCarthy, and Minority Whip
Hoyer:
The below signed independent supermarket companies and state trade associations strongly
support the debit reforms passed as part of the 2010 Dodd-Frank Wall Street Reform and
Consumer Protection Act (P.L. 111-203). An amendment offered by Senator Dick Durbin (D-IL)
and passed by the Senate as part of the Dodd-Frank Act reigned in debit interchange fees (setting
them at a level that is “reasonable and proportionate” to the cost of the transaction), while
requiring that at least two, non-affiliated debit routing networks be available for each debit
transaction. Debit reforms have brought transparency and competition into a market that had
previously been broken.
Over the past six years, debit reforms have provided significant benefits to consumers,
businesses, small banks and credit unions. Repealing debit reforms would take billions of dollars
out of the hands of small businesses and consumers on Main Street, and hand it to the large
banks on Wall Street. As representatives of independent supermarkets across the United States,
we urge you to oppose the Financial CHOICE Act upon its reintroduction, if the final bill
contains attempts to weaken or repeal debit reforms.
Debit reforms preserved and increased competition in the debit routing market by requiring that
every debit transaction must have at least two non-affiliated debit routing networks available to
process the transaction. Prior to the implementation of debit reforms, Visa and MasterCard were
able to sign exclusivity agreements with banks, effectively eliminating dozens of regional debit
routing networks and rapidly moving the debit routing market towards a duopoly. The routing
provision of the debit reforms passed in 2010 have spurred networks to compete with one
another, prompting networks to innovate. Because of these reforms, debit networks have
competed extensively to better secure their payments, providing significant benefits throughout
the payments chain.
The debit reforms included in the Durbin Amendment only apply to banks with over $10 billion
in assets that have their interchange fees centrally set - just 1.4% of all U.S. banks currently1. It
is important to note that any bank that chooses to do so can exempt itself from debit reform
conditions by choosing to set its own fees without the input of the card companies. Banks could
choose to exempt themselves from debit reform guidelines tomorrow, if they decided to compete
on interchange fees. Currently, only Chase Bank has chosen to compete on price, recently
introducing Chase Pay and negotiating with merchants on their interchange rates. Meanwhile,
other banks operating under debit reform rules are content to make a 500% profit on each
interchange transaction2.
Consumers have benefitted significantly from debit reforms, despite opponents of debit reform
claiming that businesses have not passed along savings. Economist Robert Shapiro estimates that
consumers have saved more than $30 billion in the years since debit reform was implemented3.
Competition in the food industry is fierce and as a result consumers benefit from lower prices,
variety of products, and customer service. Debit reforms have helped many independent
supermarkets remain competitive in the marketplace despite the average net profit margin for
independent supermarkets being between 1-2 percent. At the same time, banks and financial
institutions enjoy a nearly 25% profit margin and continue to make nearly $79 billion per year in
swipe fees4-the highest in the world5.
Debit reforms have been in place for nearly six years now and they have been working. Reforms
have led to increased competition in a previously broken market; better payments security; a
larger market share for small banks and credit unions; lower fees for businesses and savings for
1
Federal Reserve Statistical Release. Large Commercial Banks. https://www.federalreserve.gov/releases/lbr/current/
The Facts About Debit Reform. The Merchants Payments Coalition.
http://21353cb4da875d727a1dccea4d4b51151ba804c4b0295d8d06a4.r8.cf1.rackcdn.com/Facts_About_Debit_Reform_2015.pdf
2
Merchant Advisory Group, Volume and Cost Trends in the Debit Card Industry.
https://files.ctctcdn.com/26db5c23201/8b43b2a5-993d-4c1a-ac9b-07c8acc488ea.pdf
3
The Costs and Benefits of Half a Loaf: The Economic Effects of Recent Regulation of Debit Card Interchange Fees.
Robert Shapiro. https://nrf.com/sites/default/files/The_Costs_and_Benefits_of_Half_a_Loaf.pdf
4
U.S. Merchants Card Processing Fees Continue to Rise. Nilson Report. June 24, 2015.
https://www.nilsonreport.com/upload/pdf/U.S._merchants_card_processing_fees_continue_to_rise_-_Chain_Store_Age.pdf
5
The Cost of Accepting Credit Card Payments: NA vs. EU. Robert Harrow. http://www.valuepenguin.com/interchangefees-navs-eu
consumers. Repealing debit reforms would harm each and every card-accepting business in the
United States, and have negative consequences on consumers.
With the CHOICE Act expected to be reintroduced in the coming weeks, we encourage you to
not to bring the CHOICE Act to the House floor for consideration. Debit reforms have been in
place, and working, for several years now. Repealing them would be a step in the wrong
direction and would have significant negative consequences for independent supermarkets,
consumers, debit routing networks, as well as small banks and credit unions. We will continue to
actively oppose any efforts to weaken or repeal the law and ask every member of Congress to do
the same.
Sincerely,
A & R Super Markets, Inc.
A street market
Adamco Inc
Alabama Grocers Assoc
Alliance Retail Group
Andrew Insurance Associates
Appleseed IGA
ARG
Arizona Food Marketing Alliance
Arkansas Grocers and Retail Merchants Association
Asker's Harvest Foods
Autry Greer and Sons, Inc.
B & R Stores, Inc.
B. Green & Company, Inc.
Baker's IGA
Balls Food Stores
Ball's Price Chopper & Hen House Markets
Bells Food Center, Inc.
Benewah Market
Blackford Foods
Bob's Supermarket Inc.
BOJK, Inc
Bracey's ShopRite Supermarkets
Brackett's Market, Inc.
Breaux Mart Supermarkets
Brink's Market
Bromley's Market IGA
Buche Foods
Buehler's Fresh Foods
Burwell Shurfine Food Center
Byers General Store
California Grocers Association
Callaway Market
Carolinas Food Industry Council
Cashsaver
Casler, Inc
Casos Country Foods Inc.
Charley Family Shop 'N Save
Chester's Market, Inc
Chubb Foods
Clayton Ranch Market
Cleghern's Piggly Wiggly
Cloninger's Harvest Foods
Colerain Foods Inc dba Colrain IGA
Columbiana Foods Inc.
Connecticut Food Association
Convenient Food Mart
Country Boy Mr. D Corp
Cox's Foodarama Inc.
Cranford's Fresh World, Inc
Cranford's Supermarkets
Crete Foodmart
Cubby's Inc.
Cubby's Old Market Grocery
Danforth's Down Home Supermarket
Daville Hometown Market
Danville Supermarket LLC
Davis Food & Drug
Dayton Mercantile
Dierbergs Markets
Doc's Food Stores, Inc.
Don's Quality Market
Dorothy Lane Market Inc.
Dots Supermarkets
Doug's Market
Draeger's Super Markets, Inc.
Economy Hometown Market Inc.
Eikenberry's IGA
Eldens Fresh Foods
Ellwood City Save-a-Lot
Emlenton IGA
Erdmans Supermarket Inc.
Esch Grocery Store, Inc.
Expressway Foodmarts
Family Foods
Farmhouse Market
Fiesta Foods
Florida Grocers Association
Floyd's Harvest Foods
Food 4 Less
Food City
Food Giant
Food Industry Alliance of New York State
Food Parade inc.
Food Valu
Foothills IGA Market
Four Seasons Market, Inc
Fox Bros. Piggly Wiggly
Fremin's Food and Furniture Inc.
Fresh City Market, LLC
Fresh Encounter, Inc.
Friedman's Freshmarkets
Frontier Foods
Fuller's Supermarket
Fulton Save A Lot
G.E. Foodland, Inc.
Gateway IGA
GCM The Big Store
GE Foodland, Inc.
Genes Harvest Foods
Georgia Food Industry Association
GES, Inc., Edwards Food Giant
Geyers' Markets Inc.
GF Buche Co.
Glass ShopRite
GLN INC
Gongco Foods
Grant's Market, Inc
Gregerson's Foods Inc
Grocery Basket
Grolmus Enterprises Inc.
Harps Food Stores, Inc.
Harvest Foods
Harvest Market
Hawaii Food Industry Association
Heights family foods
Henderson's IGA
Hi Nabor Supermarket, LLC
Highland Park Market
Hilltop Supermarket
Holiday Market
Houchens Industries, Inc.
Huckleberry's Natural Market
Huffman's Market
Hugos Family Marketplace
Hunter IGA Express
Idaho Retailers Association
Ideal Market
IGA Express
IGA USA Inc.
Illinois Food Retailers Association
Imperial Distributors
Island Foods, Inc.
Island Grocery Depot
Janssen's Market LLC
Jerrys Foods
John's Grocery and Hardware
K M Supermarkets Inc.
Kansas Food Dealers Association
Kaune's Neighborhood Market
KD's IGA
Keith's Foods Inc.
Kennie's Markets, Inc.
Kenny's IGA Seafood Grocery
Kentucky Grocers and Convenience Store Association
Kirwen's Supermarket
Krystyna's Deli, Inc.
KTA Super Stores
K-VA-T Food Stores, Inc.
LaBonne's Market
Leon's Gourmet Grocer
Leprekon Harvest Foods
Louisiana Retailers Association
Lowe's Market
Mackenthun's Fine Foods
Macke's Grocery, Inc.
Maine Grocers & Food Producers Association
Maline's SuperFoods Sutherland, NE
Market Square Supermarkets
Maryland Retailers Association
Massachusetts Food Association
Maya Management Group/ El Rio Grande Latin Market
McGownan's Grocery
Meat Merchandiser, Rosauers
Meehan's Supermarkets
Mentor Family Foods
Michigan Grocers Association
Midway IGA
Minnesota Grocers Association
Missler IGA
Missouri Grocers Association
Ms. Streeter
Mitchell Grocery
Murphy Food Stores, Inc.
National Co+op Grocers
National Grocers Association
Nebraska Grocery Industry Association
New Hampshire Grocers Association
New Jersey Food Council
Newport Ave Market
Niemann Foods, Inc.
North Dakota Grocers Association
North State Grocery Inc.
Nugget Market, Inc.
Ohio Grocers Association
Oklahoma Grocers Association
Oldtown Family Foods LLC
Ord Grocery Kart Inc.
Oregon Super Valu inc.
Orland Mid Town Market
Oshkosh Superette
Ozark Empire Grocers Association
P.W. Plummer & Sons, Inc. d/b/a Plummer's Shop 'n Save
Palace Market
Payless Foods
Pennsylvania Food Merchants Association
Pierre Part Store, L.L.C.
Piggly Wiggly #92
Piggly Wiggly of Red Bay
Pilotrock market
Plaza Super Jet
Potash Markets
Potash Markets-Chicago
Prisco's Family Market
Puckett's Food Stores
Quillins Inc.
Ragland Bros. Retail Cos., Inc.
Rehkopf Enterprises, Inc.
REM Market
Remke Markets Inc.
Retail Association of Nevada
Retail Data Systems
Retail Grocers Association of Greater Kansas City
Richter's Marketplace
Ric's Food Center
Rideout's IGA
Ried's Markets, Inc.
Rightway Grocery
RLH Foods, Inc.
RMSpelman INC
Roberts Company Inc.
Roche Bros. Supermarkets Co.
Rock Cave IGA
Rocky Mountain Food Industry Association
Romeo's Inc, dba West Side Marketplace
Rosauers #16
Rosauers #33
Rosauers 5-mile
Rosauers Food and Drug
Rosauers Supermarket Colfax Washington
Rosauers Supermarkets #103
Roselynn, Inc.
Rush Foods, inc.
S&C Foods
Saleh group inc dba bordeaux foods
Save More Food Markets Inc.
Schexnayder supermarkets
Schmitz's Economart
Sendik's Food Markets
Shoppers Valu Foods
Shoppers Value
Shoprite of Hunterdon County
ShopRite
Smithfield Markets
Snows Family Market
Sonny's Super Foods
South Dakota Retail Association
SpartanNash
Speciality Grocer
Spencer's Supermarket
Steve DeYoung's Big Top Market Inc
Stop and Compare Supermarkets
Stormans Inc.
Super 1 Foods
Superb Super Markets INC
Superlo Foods
Supermarket Operations Inc.
TA Solberg Co., Inc.
Techau's Inc.
Tennessee Grocers & Convenience Store Association
Texas Food and Fuel Association
the Dollar Stretcher
The McWhorter Group, Inc.
Thompson's IGA Foods
Thramers Food Center
Town and Country Discount Foods
Triangle Grocery Inc.
Trout Creek Local Store
Tybee market Inc. IGA
URM Stores INC
Utah Food Industry Association
Vallarta Supermarkets
Valley Isle Produce
ValuMarket
Vermont Retail & Grocers Association
Vicente Foods
Viking Village Inc
Washington Food Industry Association
Wade's Food Center, Inc
Wagner's IGA
Wakefern Food Corp.
Walla Walla's Harvest Foods
Wallowa Food City
Walnut Creek Cheese
Walter's Supermarket Inc
West Virginia Oil Marketers & Grocers Association
Western Supermarkets, Inc.
Westside IGA
Wilke's
Willie's Supervalu
Windham IGA
Winegar's Supermarkets, Inc.
Wingerts Food Center, Pharmacy, Subway, & Do It Best Hardware
Wingert's Inc.
Wisconsin Grocers Association
Woods Super Markets
Wray's Marketfresh IGA
Wright's Market
Yoke's Foods
Zuni Shopping Center, Inc.
Cc: Members of the House of Representatives