A coalition of retailers dedicated to capping and reducing cardinterchange hopes that U.S. legislators and regulators might followa European example on the subject.

Last Friday, Sen. Richard Durbin(D-Ill.) and U.S. Rep. Peter Welch (D-Vt.)addressed a letter to Ben Bernanke, chairman of the Federal ReserveBoard, asking that he “carefully review” the proposal from theEuropean Commission on credit and debit card interchange.

The European Commission has proposed capping debit and creditcard interchange at 0.2% and 0.3% respectively. The EuropeanCommission functions as the administrative and regulatory authorityfor the European Union.

“Our nation is undergoing a transition from a cash andcheck-based currency system to a system where American dollars areprimarily transacted electronically,” the legislators wrote intheir July 26 letter. “While this transition has brought manybenefits, it has also resulted in the delegation of control overour sovereign currency to private entities.”

The MerchantPayments Coalition, an association of retailers and retailassociations opposed to card interchange, expressed hope that theEuropean move might lead to changes in policy in the U.S.

“We welcome (Durbin's and Welch's) request for the FederalReserve to review the European Commission's proposal to reduceswipe fees on debit and credit cards,” the MPC said in a July 26statement.

“The EU proposal confirms what close observers long have known.The Fed caved to the bank lobbying on debit reform in a way thatsimply can't be justified by the facts. The European Union hasconsulted experts and studied swipe fees for years and found thatlimiting debit fees to 0.2% helps consumers, merchants and theeconomy while giving banks are card companies plenty of profit.With this evidence, the Fed should recognize it made a mistake andchange its rule to benefit everyone,” the MPC said.

Meanwhile, financial institutions which have banded together todefend card interchange pointed out that the claims of merchantshave worn very thin.

“These same retailers who are receiving an $8 billion windfallevery year as a result of the Durbin Amendment are now turningaround and demanding even more, even though consumers haven't seenany savings at the register,” noted Sam Fabens, spokesman for theElectronic Payments Coalition. ” Enough is enough — these tired oldarguments and this battle have been put to bed.”