Former FTC Chair Defends Credit Card Industry in House Testimony

By Ivan Schneider, FinanceTech

In testimony before the House Subcommittee on Commerce, Trade, and Consumer Protection, former Federal Trade Commission chairman Timothy Muris defended current industry practices against consumer advocates and a merchant trade association. He spoke at the request of the Electronic Payments Coalition, a financial services industry trade organization.

At stake is over $30 billion in interchange fees paid annually by merchants to their acquiring banks, representing approximately 15 percent of issuing bank profits. In a consolidated complaint encompassing 47 antitrust lawsuits, merchants have alleged that the banks and the associations have engaged in anticompetitive behavior. “The card associations set interchange rates for all of their member banks, and all of those member banks must agree to charge the same rates,” said Henry Armour, president and CEO of the National Association of Convenience Stores (Fairfax, Va.). “This is nothing more than price fixing.”

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