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Monday, July 16, 2012

ABA Keating: Retailers, Not Consumers Benefit From Settlement

ABA is hopeful that the Visa-MasterCard settlement marks the final chapter in what has always been nothing more than a legal battle between two industries over who should pay to support the nation’s incredibly efficient payment system, ABA President and CEO Frank Keating said in a statement Friday.
Let’s be clear -- retailers, not consumers, benefit from … [the] resolution. This settlement even provides merchants with the ability to impose ‘checkout fees’ on customers just for using credit cards.

Even after receiving an $8 billion annual windfall from the Durbin amendment, they refused to pass along promised savings to customers and sued the Fed for even more profits. Big-box retailers will likely seize this opportunity to ask Congress for even more handouts.
He added that if retailers use the settlement to justify more government price controls, they will be just trying to profit at their customers’ expense.
These types of issues are best resolved by market participants. Recent history illustrates the negative consequences for consumers when policymakers choose winners and losers and distort the marketplace.
The ill-conceived passage of the Durbin amendment, which led to increased profits for big-box retailers and no savings for consumers, was an example of such marketplace distortion, he said.
Only time will tell if this history will repeat itself, as retailers continue to show little regard for consumers. While the banking industry may not like all the results in this case, our industry is ready to put this matter behind us and continue playing a critical role in our nation’s economic growth and job creation.
Read Keating’s statement.

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