June 6 , 2008

We need your help in Congress!
Senators Request Detailed Credit Card Fee Info
Law Protects Industry from Litigation Over Credit Card Expiration Dates
Farm Bill Containing COOL Compromise Passes with Chambliss Support
Retail Tax Breaks Extended
Atlanta’s Americasmart Expands


We need your help in Congress!
Help us advance H.R. 5546, the Credit Card Fair Fee Act, is gaining momentum in the House and we need your help now more than ever. It is critical that we line up the votes of House Judiciary Committee members in support of the bill. This is the crucial next step in the legislative process and necessary before a House floor vote. Please either write your Representative or call their district office to voice your strong support of H.R. 5546, and to increase our chances, get your colleagues and fellow employees to write or call, too.

Talking Points: (A sample letter is attached to this issue of the capitol Retail Report)
• I am a very strong supporter of H.R. 5546, the Conyers-Cannon Credit Card Fair Fee Act. Please vote to report this bill from committee.
• Interchange fees are the one cost of doing business I cannot negotiate.
• Visa and MasterCard's anticompetitive practices have forced me into a take-it-or-leave-it situation.
• Interchange fees are unfair and unreasonable.
• Out of control interchange fee increases are one of the biggest concerns for my business.
• The Credit Card Fair Fee Act is a market-based solution. It would allow retailers of all sizes to negotiate with the credit card companies.
• Open negotiation is the first step in providing relief to retailers of all sizes.

As you all know, the credit card companies, banks, and credit unions have a very strong lobby in Washington, and virtually unlimited resources. Since H.R. 5546 was introduced they have gone on a hiring spree, retaining some of the best known lobbyists in town. The only way we can garner the necessary support for the Credit Card Fair Fee Act is with your grassroots help. Your Members of Congress need to hear directly from you and your colleagues that you are fed up with the unfair practices of the credit card companies, and that you strongly believe the Credit Card Fair Fee Act is the best market-based solution to rein in the anticompetitive behavior of Visa and MasterCard.

We need your help to make sure we win that vote. Please let me know if I can count on your support when the Credit Card Fair Fee Act is marked up.

Congressional Sample Letter

Senators Request Detailed Credit Card Fee Info
On their recent visit to Capitol Hill, GRA Chair Anthony Waters, Immediate Past-Chair Tommy McFarland and GRA President John Heavener asked Georgia’s Congressional to require transparency in Visa and Mastercard contracts. Subsequent to that visit several U.S. senators want Visa Inc and MasterCard Inc, the dominant electronic payment companies, to break down detailed costs associated with transactions called interchange fees.

In letters to the two companies, senators demanded information about methodologies and specific data used to establish interchange fees. The letters are dated May 23 and demand the information by June 3
The letters were signed by Democrats Richard Durbin of Illinois and Herb Kohl of Wisconsin and Republicans Olympia Snowe of Maine and Arlen Specter of Pennsylvania. The senators cited a third-party analysis that estimated about 13 percent of collected interchange fees are used to pay for the processing costs and the majority is used for reward programs, issuer profits and other unspecified costs.

The U.S. credit card industry last year rang up $42 billion in interchange fees, which are incurred each time a consumer uses a credit card to buy a product.

Consumer groups, grocery and drug stores and other retailers are concerned that the payment card industry is setting higher non-negotiable fees for card transactions and the system lacks transparency.

Merchants believe that Visa and MasterCard are colluding to set interchange fees much as cartels can fix prices.

Earlier this year, Representative John Conyers, Chairman of the House Judiciary Committee, introduced legislation that would create a panel to determine interchange rates and terms.

Visa, MasterCard and issuing banks criticized the bill as amounting to price controls that will result in higher fees for consumers.

Law Protects Industry from Litigation Over Credit Card Expiration Dates on Receipts
President Bush has signed legislation that protects all merchants from frivolous lawsuits over credit card expiration dates printed on customers’ receipts.

The Credit and Debit Receipt Clarification Act says a business that printed an expiration date on a receipt over the past 18 months cannot be found in violation of the Fair Credit Reporting Act as long as the merchant printed no more than the last five digits of customers’ credit or debit card numbers on receipts and complied with other FCRA requirements.

Hundreds of merchants have inadvertently run afoul of the law due to the confusing language in this the provision.

The House and Senate approved the Credit and Debit Receipt Clarification Act without opposition in May. The bill was sponsored as H.R. 4008 in the House by Financial Services Committee member Representative Tim Mahoney, a Democrat from Florida and the companion, bill, S. 2978 in the Senate by Banking, Housing and Urban Affairs Committee member Senator Charles Schumer, a Democrat from New York.

At issue is a provision in the Fair and Accurate Credit Transactions Act – a 2003 update of FCRA – intended to prevent credit card fraud. Under FACTA, merchants were told they could no longer print more than the last five digits of a credit or debit card number “or” the card’s expiration date on receipts after December 4, 2006. Many merchants interpreted the law as meaning they could either truncate the card number or leave off the expiration date, but that they were not required to do both. Most truncated the card number but some continued printing the expiration date, reasoning that the expiration date was of no value without the full card number.

Businesses have been hit with more than 300 class action lawsuits contending that FACTA required them to take both steps, and seeking fines as high as $1,000 per incident, the maximum allowed under the 2003 law. FACTA does not allow individuals to sue, instead giving enforcement authority to the Federal Trade Commission, but the lawsuits were brought under state laws citing FACTA.

The legislation protects businesses from lawsuits for expiration dates printed between the time the FACTA rule went into effect and the time the measure is signed into law. Merchants are required to both truncate card numbers and leave off expiration dates going forward.

Farm Bill Containing COOL Compromise Passes with Chambliss Support
Saxby Chambliss, moving away from the Republican opposition, played a key role in the passage of the 2008 Farm Bill.
With most House Democrats and quite a few Republicans supporting it, the bill was approved on Thursday by 306 to 110. The Senate quickly followed suit, 82 to 13. The votes in both chambers were far more than enough to defeat the veto that President Bush cast on Wednesday.

However, even though the House had already voted, by 316 to 108 to override the veto, they discovered on Wednesday evening that a 34-page section of the 673-page bill was missing from the package that was sent last week to President Bush, who executed his veto after calling the measure bloated and wasteful. The version that the House voted for in its override on Wednesday was also missing that section, which pertains to trade programs and foreign food aid.

The Thursday May 28 vote in the House was on all 673 pages, and embraces subsidies for farmers, food stamps, land conservation and various other items too attractive for most lawmakers to shun.
If Mr. Bush wants to, he can use his veto power all over again, and Congress will have to vote again to override him. Or he could simply let the bill become law, now that it is obvious that it is too popular for him to kill.

Fortunately, the COOL compromise language was included in one of the 14 titles that were sent to the President and enacted. But with questions about completing work on the Farm Bill lingering, the timing of the COOL language going into effect also remains up in the air.

As a reminder, the COOL compromise covers:
• Chicken, goat meat, macadamia nuts, pecans and ginseng are added as covered commodities.
• The current program of two labels for meat – “Product of the US” or “Born, Raised and Slaughtered” – is replaced with a four tier system.
• Ground beef labels may contain a narrative list of all the countries of origin from which the ground beef could “reasonably” have come (as opposed to the current standard, which requires a list of the specific countries from which the ground beef was derived).
• Meat from animals continuously in the United States before July 15, 2008 can be labeled as "Product of the US."
• Only records “maintained in the course of the normal conduct of business” – such as animal health papers, import or customs documents or producer affidavit – may be required. No new or additional records may be required for verification purposes. This applies to retailers, as well.
• Retailers (or others) who make a “good faith” effort to comply with the law may not be subject to fines for violations of the law. Only retailers found to be willfully violating the law may be fined.
• Fines are lowered from $10,000 to $1,000 per violation.
• State and local labels are now acceptable to establish US country of origin for perishable agricultural commodities, peanuts, pecans, macadamia nuts and ginseng.

Retail Tax Breaks Extended
On their visit to Capitol Hill, GRA Chair Anthony Waters, Immediate Past-Chair Tommy McFarland and GRA President John Heavener asked Georgia’s Congressional delegation to extend the 15-year depreciate rate on store remodeling rather than having it revert back to the previous 39-year amortization schedule. That bill was passed by the House and is expected to be taken up by the Senate the week of June 1, 2008

Typically, retailers remodel every five to seven years in order to maintain customer interest and compete with newer stores. The shorter period will help boost the economy by encouraging more store owners to re-invest in their businesses.

Atlanta’s Americasmart Expands
Atlanta’s downtown trade complex facility, AmericasMart will add a new two-story ballroom and event venue by this fall. This 70,000 square-foot addition will be placed on top of Building 1 of the AmericasMart complex. The new space will be used for corporate events and gala parties.

AmericasMart features a fully carpeted 96,000 square-foot exhibit hall and 17 meeting rooms in its Merchandise Mart (connected to the 1,100-room Westin Peachtree Plaza via concourse), four meeting rooms in its Gift Mart, and a 14-story Grand Atrium that can accommodate up to 5,000 for a reception and 828-seat theatre in its Apparel Mart. In addition, it offers a full-service conference room and eight meeting rooms.

AmericasMart will be the site of Georgia’s first state-wide Lost Prevention Conference this September 16, 2008.


Thank you.
 
 
John C. Heavener, MSM, CAE
President
johnh@georgiaretail.org
Telephone – 770-484-3449, ext. 21
Fax – 770-484-5727
 
Georgia Retail Association
 
About GRA: The Georgia Retail Association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, and grocery stores has been serving the state’s business community since 1961. The Georgia Retail Association represents an industry with more than 71,300 retail establishments, and more than 715,000 employees - about one in five of Georgia’s workers - and 2004 sales of $115.2 billion.

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