It’s one of those good-news, bad-news day. On the plus side, swipe fees have surfaced again, renewing the battle for retailers, while the U.S. House of Representatives votes to drain the Highway Trust Fund.
A new class action suit was recently filed against Visa and MasterCard by a group of retail merchants that include such firms as Wawa, RaceTrac, Waffle House, Quick Chek and some convenience store chains. The eventual ruling could have an impact on dealers and marina operators that accept credit and debit cards for services like fuel, supplies and service.
The retailers allege these credit-card companies have unlawfully restrained competition in credit-card services by conspiracy in violation of federal antitrust laws. Specifically, the setting of default fees is price-fixing at a high level, substantially higher than would be the case if there was competition for merchant acceptance.
The result has forced retailers to pay excessive interchange fees. Retailers say they’ve paid hundreds of millions of dollars in just the last year to banks that issue Visa-branded and MasterCard-branded credit and debit cards. Moreover, these interchange fees are no small matter, but are among a retailer’s major expenses.
Earlier this year, Visa and MasterCard reached undisclosed settlements with a group of merchants who had opted out of a massive $7.25 billion class-action settlement over its swipe-fee policies. The settlement was upheld by the courts which, at that time, was believed to end the “swipe fee wars.” Fortunately for retailers, it’s not over.
Trust fund will run dry
In a not-so-surprising action, or inaction, the U.S. House has ducked the need to pass longer-term funding for the Highway Trust Fund, according to reports by Reuters. Rather, they’re going to let the fund run dry.
The marine industry is particularly tuned into this issue because money for the very valuable Sport Fish Restoration and Boating Trust Fund comes through the Highway Trust Fund. A non-partisan vote (387-35) this week only passed a two-month extension of spending authority on transportation projects. It will, in effect, avoid any decisions until the fund runs out of money in July.
Typically, Congress has waited till the last minute and failed to get the job done right. Current authority for federal road, bridge and rail projects will expire on May 31. The Senate now must act fast. What is really needed is a six-year funding plan. The two-month extension reportedly resulted from lawmakers’ inability to agree on such a plan. They couldn’t even agree on an extension through the end of 2015. So, now the problem just moves to July.
The Highway Trust Fund is supported by federal fuel taxes, last increased in 1993. Money for the fund has been decreasing in recent years. Lawmakers from both parties have ruled out a fuel-tax hike as a solution.