As retail operators return to work this week after what was hopefully a busy Memorial Day weekend for them, they should be encouraged by some rare good news out of Washington, D.C. The industry had some big wins last week on very important issues. Republican House leaders wisely decided to remove language from the popular CHOICE Act that would have repealed the debit card swipe fee reforms the industry fought hard to pass in 2010.
Since the election in November and the subsequent announcement that Trump intended to seek repeal of the Dodd-Frank law, the banks and credit card companies began to salivate at the prospect of gutting it, including its hated caps on debit card fees they could charge retailers. The retail industry mobilized quickly and effectively. Republicans in Congress came to their senses knowing they faced a repeat of the bloody fight from seven years ago. Having little stomach for that battle and an unwillingness to face the wrath of Main Street retailers back home, leadership simply removed the language that would have repealed those caps. Finally, a win for the good guys.
If that wasn’t enough, after hearings in the US House last week, it appears that support has significantly eroded for the Border Adjustment Tax (BAT) that would put levies of up to 20% on thousands of imported consumer items. This was a tactic to raise revenues to offset other tax cuts during the corporate tax reform process. Even though this is the favored approach of Speaker Paul Ryan and other House leaders, many Republicans have backed off of their support and Treasury Secretary Mnuchin voiced the administration's opposition again this week. It is hard to see how the proposal, in its current form, could move forward, which is good news for retail operators.
All in all, last week was a pretty good one for the retail Industry and this newfound momentum will be important if the industry is going to protect its interests during the healthcare reform and tax reform battles to come.