Credit Fee Cap Dies In House

We thought you would find the following story from blacklocks.ca of interest and relevant to the fact that ACTA participates in a coalition known as the Small Business Matters Coalition addressing the need for fairer credit card fees for independent businesses. With the exorbitant credit card fees we have in Canada (unlike other jurisdictions including the European Community, Australia and Spain) eroding the profitability of many small and independent businesses, this is an issue that ACTA needs to be involved.

The “ask” of government is not to pass on the credit card fees to consumers but rather make the charges more fair, especially in comparison to other jurisdictions where regulatory intervention has proven successful.

STORY:
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A motion to regulate billions in credit card fees charged to merchants and restaurateurs has lapsed in the Commons. Conservative MPs said they would not support fee caps, though one caucus member accused credit card issuers of “near-extortion”.

The New Democrat motion urged that Parliament cap transaction fees currently averaging more than 1.5 percent. Visa and MasterCard collect $5 billion a year through the charges, by official estimate. The two companies account for 90 percent of the Canadian credit card market.

“I am tired of throwing small business owners to the whims of the market,” said MP Judy Sgro, Liberal industry critic. “It is time to reset the balance.”

“My husband and I owned and operated a small business for many years so I know very well what it is like to worry,” said Sgro, MP for York West, Ont.; “Higher bank fees, whether merchant fees or any other form of variable cost, hit small business right in the wallet”; “This hands-off approach to the problems faced by small and medium-sized businesses is plain wrong.”

Motion 547 proposed, “The government should take immediate steps to make the cost of living more affordable for the middle class by lowering costs for businesses and consumers by reducing transaction fees charged to merchants; and allowing merchants to disclose to the consumer the transaction costs relating to the payment methods chosen at point of sale.” MPs last night adjourned debate on the proposal for the remaining weeks of the 41st Parliament.

A separate bill proposing first-ever regulation of fees was defeated in the Senate banking committee April 2. Bill S-202 An Act To Amend The Payment Card Networks Act set caps of transaction fees of 0.5 percent on merchants; 0.3 percent for public institutions; and zero for charities. The bill’s sponsor Senator Pierrette Ringuette (Liberal-N.B.) noted the European Union has adopted a 0.3 percent fee cap.

In the Commons, Conservative MP John Williamson cited his own experience in condemning the interest rates and intrusive questionnaires facing consumers who apply for credit cards. “I recently applied,” Williamson said; “I was appalled at the depth and scope of the questions I was asked by one of our country’s leading banks.”

“I was told my information could be shared with any of its other business operations,” said Williamson (New Brunswick Southwest). “The banks are simply asking, and obviously collecting, too much information from Canadians, right down to the amount I pay for rent, and the liquidation value of my 2007 F-150.”

“Respect is a two-way street and Canadians are entitled to it when dealing with our banks,” Williamson told the House; “We all have credit trouble at some point in our lives, so what was equally egregious is being told the card’s interest rate at 20 percent rises to 25 percent if a payment is missed by the due date. When the prime lending rate is 3 percent, this is near-extortion on working families and makes payday loans look like a giveaway.”

The Conservative MP declined an interview.