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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