By Lexie Carter
Special to The Tri-State Defender

Please do not be misled by ads that confuse the Credit Card Interchange Rate issue with the Credit Card Bill of Rights Bill that was just approved in the U.S. House of Representatives and by an overwhelming vote of 90-7 in the U.S. Senate.

In March 2008, Wal-Mart and Target teamed up to present a bill to the U.S. House of Representatives called the “Credit Card Fair Fee Act” but would better be called the “Big Retail Windfall Act.” It would grant a rare antitrust exemption to retailers (such as Wal-Mart), allowing them to collude in order to set the terms and conditions for which credit cards can be used in their stores.

This would boost their profits by pushing down the interchange rate they pay for the privilege of offering electronic transactions to their customers. No one likes to pay fees, but most retailers don’t mind paying a reasonable rate for the services they receive.  Consumers would get no benefit from such action. Last year the house judiciary committee rejected a bill that would require retailers to pass on the savings to consumers.

There is also a real risk that this effort would impact the “points” rewards programs taking benefits away from millions of families. Another frightening risk is the possibility of less credit availability if the bank decides that it is no longer profitable to issue credit cards to lower income groups. Then there is the consideration of the impact this bill would have on smaller businesses.

In fact, in a letter from Harry Alford, President and CEO of the National Black Business Association addressed to the House Judiciary Committee, he stated that, “We suspect that the coalition of merchants asking for Congressional intervention on this issue may not have heard the diverse views of Black business owners, many of whom understand interchange fees and see them as a necessary business expense. They understand that some of the more common challenges in the small business arena include competing with large big box retailers that, for a variety of reasons, are able to offer similar products at lower prices.” (Read Mr. Alford’s complete letter at www.nationalbcc.org.) He goes on to  express grave concerns about the impact of such legislation on his constituency since big box retailers like Wal-Mart have poured so much resources into pushing this legislation forward.

It is quite feasible that this act could force smaller banks and credit unions out of business because they would be pushed out of the credit card aspect and especially at a time when they are struggling through the current credit crisis.

Historically, antitrust exemptions have often led to abuses that are difficult to stop legally. If the U.S. government allows the most dominant retail corporations in the country to collude in this area, it will be very difficult to stop them from engaging in anti-consumer and anti-competitive collusion in other ways. Wal-Mart and its new partners could use their enormous combined market power to raise prices, intimidate workers and stifle competition.

Please take a moment and look at this issue, which is very vital to our community.  Contact your representative and express your opposition to any measure that would work to disrupt our community and cause even one more business to fail.

(Lexie R. Carter is a Memphis-area community activist.)