Congress Eyes CardsInterchange
WASHINGTON - (06/16/06) Congress announced plansThursday to step into the cards interchange wars with hearings oncredit card interchange rates. Retailers have filed more than 40lawsuits against card giants MasterCard and Visa, claiming the twodominant players illegally conspire to set the rates ontransactions. The market has grown exponentially with the declineof paper checks and is estimated at as much as $30 billion a year,with 75% of those interchange fees going to one of the two cardgiants. Credit unions and other small players in the market havebecome pawns in the battle of giants, with MasterCard cutting dealsdiscount deals with the big banks that control it, and hugeretailers, like Wal-Mart cutting their own discount deals. TheSenate Judiciary Committee has scheduled a hearing on the issue forJune 28. At least one senator, Democrat Christopher Dodd ofConnecticut, said the Congress or the Federal Reserve shouldconsider federal regulation for the market for interchange, asother countries like Australia and Canada, have done recently.MasterCard and Visa dominate the markets in both of thosecountries, too.