Per Digital Transactions: “The U.S. House Judiciary Committee passed the “Credit Card Fair Fee Act of 2008” on Wednesday on a 19-16 vote, but with a significant change. The marked-up bill no longer includes a provision that would have established a three-judge panel to arbitrate interchange pricing should merchants and the bank card networks fail to agree on rates. Instead, the bill now assigns enforcement to the U.S. Department of Justice’s Antitrust Division.”

So we’ll see if it has any legs when it comes to the whole House. I hope not. I’ve always seen this as a bill that essentially creates inefficiency in the pricing structure for card transactions, and one that introduces undue complexity that will eventually come back to bite cardholders (yes—those same consumers that Congress is purporting to protect) with more fees and more obfuscation in the ability to use cards.

Just to be clear: all the above is bad.

Further in the DT article: ‘Conyers in his statement insisted as he has since introducing the bill in March that it is not an effort to set price controls. “Currently, the retailers are forced to enter take-it-or-leave-it contracts before they can accept Visa and MasterCard at their stores,” he said. “H.R. 5546 simply levels the playing field and encourages negotiation.”’

This is puzzling to me, especially as I come from the merchant side of the business. Merchant services providers compete fiercely for merchants’ business. Characterizing the situation as “take-it-or-leave-it” is disingenuous at best, and ill informed at worst.

Politics has no business messing with market efficiencies. I’m just wondering how they decide what a “fair fee” is in a market economy? Shouldn’t the market, not Congress or the DOJ, decide that?