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Rep. Peter Welch, D-Vt., last week introduced the Credit Card Interchange Fees Act of 2008, which would allow merchants to steer customers away from using higher-cost forms of payment, such as rewards-based credit and debit cards. It also would enable merchants to offer customers a discount for paying in cash. The bill would require disclosure to the public of credit, debit and charge card networks' interchange rates, terms and conditions, and it would prohibit card networks from enforcing "honor-all-cards" rules that require merchants to accept all types of payment cards bearing the logos of networks with which they have acceptance agreements. Another provision of the bill would empower the Federal Trade Commission to review credit card interchange rates and prohibit any practices that violate consumer-protection or antitrust laws. During a press conference to introduce the bill in Washington, D.C., Welch said consumers and small businesses are "ripped off" by interchange, which accounts for as much as 2% of every credit card transaction. Reps. Keith Ellison, D-Minn., and Bruce Braley, D-Iowa, are co-sponsors of the bill. Welch noted that the new bill would supplement the Credit Card Fair Fee Act introduced earlier this year (CardLine, 3/7). The National Retail Federation calls Welch's bill yet another indication of growing pressure against credit card interchange fees. "Transparency is a key element of Welch's bill, and since interchange is really the largest fee consumers have never heard of, this bill would put it in the spotlight," J. Craig Shearman, federation vice president of government affairs, tells CardLine. "This bill might help consumers realize how much interchange fees add to the cost of using a credit card."

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