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ICBA Statement on Judiciary Committee Passage of Interchange Legislation

Washington, D.C. (July 17, 2008)—Camden Fine, president and CEO of the Independent Community Bankers of America (ICBA), issued the following statement regarding passage by the House Judiciary Committee of H.R. 5546, the Credit Card Fair Fee Act, and legislative language attempting to address the concerns of community bankers:

"The attempted legislative fix contained in the Committee-passed bill regretfully provides no relief for community banks, and is no solution at all. In fact, language added to the bill makes matters worse.

"Thousands of community bankers would now be forced to choose between two losing propositions: either accepting the anticompetitive interchange rates dictated by the largest merchants under the antitrust exemption in the bill, or stepping out on their own to negotiate directly with millions of retailers and the Wal-Marts of the world.

"The underlying antitrust exemption contained in H.R. 5546 as adopted by the Committee would allow merchants to engage in blatantly anticompetitive negotiating tactics to drive interchange rates below market levels and would destroy the balance that allows community banks to compete. The exemption would allow merchants like Wal-Mart and Exxon to collude and force down the amount of compensation they give community banks when consumers use a card issued by a community bank. The inevitable result is debit and credit card discrimination, leading consumers to quickly abandon community bank cards in favor of larger bank offerings.

"While the language added in Committee does not make the bill in any way acceptable to community banks, it is an acknowledgment by legislators of the serious consequences community bankers would face were this proposal to become law. ICBA strongly urges the Committee and the House leadership to abandon this misguided legislation."