In a warm-up for Thursday's Capitol Hill hearing on the Federal Reserve Board's proposed debit interchange rules, merchants' representatives said that unless the rules are left unchanged, merchants might be forced to lay off employees.
"As the sizes of these [debit interchange] fees increase year over year, it means [merchants] can't hire more employees, or they have to let employees go; they have to choose between cutting health care for their employees or letting people go because of these fees," said Douglas Kantor, counsel to the Merchants Payments Coalition, at a press conference Wednesday.
Businesses rarely welcome government regulations, but in the case of debit interchange it is "one of the rare situations where we think some level of government intervention is warranted and necessary," Todd McCracken, the president and chief executive of the National Small Business Association, said during the conference.
The American Bankers Association also spoke of job losses last week in a letter to lawmakers. It contends the Fed's proposed rules would cause "extreme harm" to banks and likely would thwart job growth by forcing financial institutions to cut personnel and restrict loans to businesses.
