SENATORS LOOK FOR ANSWERS ON CREDIT CARD INTERCHANGE FEES

Senators Richard Durbin (D-IL), Olympia Snowe (R-ME), Herb Kohl (D-WI), and Arlen Specter (R-PA) have sent a letter to Joseph Saunders, Chairman and Chief Executive Officer of Visa Inc., and Robert Selander, President and Chief Executive Officer of MasterCard Worldwide, asking them to provide detailed documentation on the methodology and data that Visa and MasterCard use to set interchange fee rates. Interchange fees are supposed to ensure that issuing banks can cover their costs in processing and authorizing transactions. However, the $42 billion that Visa and MasterCard collected last year has raised concerns in Congress that interchange fees are an enormous profit center through which a variety of marketing and rewards programs are funded.

The Senators requested that Visa and MasterCard provide by June 3 an itemized list of the costs that issuing institutions bear in processing transactions made with Visa and MasterCard cards. The letter also asks for data on the amount of costs per transaction and for information on activities paid for by interchange fees.

CFTC INVESTIGATING CRUDE OIL TRADING

The Commodity Futures Trading Commission (CFTC) announced yesterday that it is taking several steps to address the skyrocketing price of crude oil. Among them was the announcement that the CFTC is six months into an investigation of crude oil trading. In addition to the ongoing investigation, the CFTC said it has reached agreements with British and European regulators that would bring transparency to trading activity regulated by authorities overseas.

This announcement follows intense pressure from Congress on the CFTC to increase oversight and bring transparency to unregulated markets.