This is an archived article that was published on sltrib.com in 2011, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Some of you may have seen an ad we ran on March 28 in The Salt Lake Tribune and other local papers, challenging U.S. Sen. Mike Lee's cosponsorship of the Debit Interchange Study Fee Act. This bill, and its companion bill in the House cosponsored by Rep. Jason Chaffetz, would delay debit card "swipe fee" reforms for two years.

Swipe fees are a tariff of sorts levied against merchants by big banks every time a shopper buys something with a debit card. This is a charge that is required by the banks in order for you to access your money. The ad asked Lee how he justified his vehement opposition to TARP bailouts for big banks while on the campaign trail, but seemed to abandon that position by cosponsoring Senate Bill 575, which would put more than $12 billion annually into the pockets of these same large banks.

While we recognize that the House and Senate bills are not exactly analogous to the TARP bailout, the Utah Food Industry Association and the Utah Retail Merchants Association believe that the cosponsorships of these bills by Lee and Chaffetz are as reprehensible as the TARP bailout.

The bipartisan banking reforms contained in the financial reform package were meant to reign in a banking industry deemed "too big to fail" that demanded the tax dollars of every American citizen to prop up their failed investment strategies.

While the bills would not require a release of funds from the U.S. Treasury directly to banks, as TARP did, they would allow banks to continue feasting directly on your wallet to the tune of nearly $1 billion per month.

Lee, Chaffetz and their staffs may argue that the TARP bailouts and the delayed implementation of the swipe fee reforms are not connected, but the bottom line is that this attempt to delay reform is every bit as offensive to Main Street America as the financial bailout of Wall Street.

Countless Utah consumers and businesses were elated about reforms passed by Congress last year on debit card swipe fees. Large banks currently charge retailers an average of $0.44 per transaction to process debit transactions. The financial reform package directed the Federal Reserve to determine a fair rate for these fees. After substantial study and analysis the Fed determined that debit transactions cost a maximum of $0.12 to complete, which is less than one third of what banks are currently charging.

Lee and others have argued that the government has no business interfering in the free market.

We agree that in most cases the free market will naturally address pricing issues without government intervention. However, in this case, Visa, MasterCard and their large banking partners have monopolized the market and thwarted free market principles.

One need only look at Europe and Australia where, after government intervention, big banks' swipe fees are only a fraction of what U.S. banks receive. Without competition, a truly "free" marketplace, with the ability to moderate these swipe fees, does not exist. The market has failed, allowing transaction costs to quadruple over the past 10 years.

Consequently, small businesses have become prisoners to swipe fees that no longer represent the fair cost of the debit transaction.

Utah's retail community urges Lee and Chaffetz to rethink their position, and other members of Congress to resist the pleas of big banks to undo these important reforms. The banks seek only to keep the swipe fee market broken, maintaining their exorbitant profits by picking the pockets of Utah's small businesses and consumers.

Dave Davis is the president and chief legal officer of the Utah Food Industry Association and the Utah Retail Merchants Association.