NFIB-Visa Pairing Draws Fire
The debate over the National Federation of Independent Business reluctance to join other small-business groups in their fight against credit card companies reached a fevered pitch this week after Visa ran an ad in Capitol Hill newspapers depicting the associations close relationship with the credit card company.
The ad came days after the House Judiciary Committee approved a contentious bill that would allow merchants to directly negotiate the fee they pay when consumers use a credit card.
The ad, which appeared in Roll Call, was designed to depict Visas commitment to small business. It features a florist superimposed on a credit card with text that reads: We also partner with organizations like the National Federation of Independent Business to help small business owners stay current on critical topics like data security and navigating the economy.
Retail lobbyists reacted with a flurry of e-mails questioning the Visa and NFIB pairing because, for the past two years, merchants and credit card companies have been pitted against each other over the interchange fee issue, causing a high-cost lobbying battle royal.
The fee, which goes toward processing transactions and fraud protection, among other things, is set by credit card associations.
For purchases today, the fee is about 2 percent of the total price, according to the Merchants Payment Coalition. While it may seem like a small price to pay, last year the credit card companies collected $42 billion in interchange fees.
NFIB has held out from joining the Merchants Payment Coalition.
The outrage is rampant on this issue, said one retail lobbyist of NFIB not joining the coalition. Its your people that are dying here.
The original legislation gave NFIB pause because it had included a three-judge panel to help decide the final rate. The proposal had been seen as anti-competitive by many involved in the debate. The final bill that passed out of the House Judiciary Committee did not include the three-judge panel.
Additionally, said NFIB chief lobbyist Dan Danner, the association hasnt polled its membership on interchange, a step that usually precedes the group taking an active position on legislation.
While NFIB did approve the ad, Danner said he didnt know anything about it.
I was not aware of when this thing was going to run and I certainly was not aware of the juxtaposition of this ad with the debate on this issue, Danner said. Our primary relationship with Visa is through our young entrepreneur foundation, which provides, among other things, scholarships for kids who are interested in entrepreneurship.
Visa spokeswoman Randa Ghnaim concurred.
This ad has nothing to do with interchange, Ghnaim said. She noted that the two organizations work on the scholarship program and that Visa has put on educational seminars on economic trends and data security for NFIB members.
That answer wasnt good enough for some in the retail industry who are frustrated by the NFIBs refusal to join the coalition.
Members of the Merchants Payment Coalition, including John Motley III of the Food Marketing Institute, have met with NFIB officials on at least three occasions to try to persuade the group to join the coalition. According to Motley, both sides agree that there is a problem.
I think what it comes down to from their standpoint is about priorities and about what they are going to work on, said Motley, who worked as a lobbyist at NFIB for nearly 25 years.
While the NFIBs top priorities are health insurance and the Bush tax cuts, we are interested in the fee issue, Danner said. There isnt a hidden agenda other than we are not 100 percent in agreement with the proposed solution.
Danner didnt rule out becoming a member of the coalition in the future.
Were absolutely looking at what came out of the markup, Danner said. We are continuing to be interested in the issue and havent made any decisions about the coalition yet.