Retailers Demand Price Controls from Congress

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Christmas is the time for goodies and gifts but lobbyists for the retail industry’s are hoping Congress grants their wish list of crony capitalist giveaways that will cost consumers while increasing their own profit margin.

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Andrew Langer, the President of the Institute for Liberty, is pulling the alarm on the crony scheme pushed for by lobbyists for the retail industry to impose federal price controls on credit card fees:

“Congress should reject European price controls,” that “while America’s regulatory costs have ballooned since 2005, Europe’s have positively skyrocketed. Thankfully, the United States has not copied the statist policies in many European counties that hamper economic growth. But right now, well-funded lobbyists are pushing a European idea that the government should set price controls on payment processing fees.  These same lobbyists were successful five years ago in implementing a cap on card swipe fees, yet that was not enough for them.  They are back for more. This time they’re clamoring for European-style price controls and claiming that the fees are weighing down the economy.”

A group called the Merchants Payment Coalition is demanding Congress copy Europe and their champion, Senator Dick Durbin of Illinois’ has pushed to cap swipe fees retailers paid for debit cards since the Dodd-Frank bill.  The add insult to injury, he openly admitted that he carried his amendment for Walgreen corporation saying, “I had the CEO of Walgreens contact me last week,” Durbin related on the floor, “and he told me that when they look at the expenses of Walgreens, …it turns out the fees that Walgreens pays to credit card companies is the fourth largest item of cost for their business.”

His effort led to an increase in revenue for the retailers, no reduction in cost for the consumers and lower revenues for the credit card companies and banks.  The Durbin amendment is also responsible in a reduction in bonus incentives that credit card companies used to offer consumers like airline miles.  But not content with the level of price controls, Durbin and his cronies are back on looking for more. Make no mistake, this is cronyism and it will lead to the government, not the free market, regulating the proper amount a retailer should pay a company for each swipe of a credit or debit card.  That has already hurt consumers and now Durbin and his lobbyist friends are looking to squeeze more out of your wallet.  That’s just priceless.
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