PROVIDENCE, RI - U.S. Senator Jack Reed (D-RI), who has played a key role in crafting landmark Wall Street reform legislation, today visited the Eastside Marketplace in Providence to discuss how the bill moving through the Senate will benefit small businesses and consumers while holding big banks and credit card companies accountable.

"Wall Street reform has a profound effect on our economy and the financial well-being of all Americans," said Reed, a senior member of the Banking Committee. "We need to bring transparency and accountability back to Wall Street. Markets work best when there is a level playing field and everyone plays by the same rules. I am working to strengthen consumer protections, help small businesses, and ensure that taxpayers will never be forced to bail out Wall Street again."

As part of the effort to increase oversight of banks and credit card companies and help consumers and Main Street businesses, the Senate last week passed a new debit card rule that could save local businesses and consumers millions of dollars.

The Swipe Fee Amendment, authored by Senator Dick Durbin (D-IL) and supported by Senator Reed, will help give retailers and small businesses nationwide more say about the fees they pay banks each time a customer swipes a credit or debit card.

"Small businesses shouldn't get unfairly shortchanged for accepting debit cards and retailers should be able to give their customers discounts without being penalized by credit card companies. We need to bring all these hidden fees into the open and demand greater accountability and transparency from the banks and credit card companies. This legislation will help stamp out anti-competitive practices, protect consumers, and help small businesses grow," said Reed.

Credit card companies like Visa and MasterCard ostensibly charge interchange or "swipe fees" to cover the cost of processing a credit or debit card transaction. However, credit card companies continue to raise "swipe fees" -- which can be about 2% of the transaction amount -- on customers and merchants, even though processing costs have actually decreased.

An estimated $48 billion in "swipe fees" were charged by credit and debit card networks in 2008 - and this money came out of the bottom line of small businesses, and 80 percent of it went to just ten large banks.

These costs add up and get passed on to the consumer. The Food Marketing Institute estimates the average American family annually ends up paying more than $400 in "swipe fees," to banks and credit card companies.

The Swipe Fee Amendment would direct the Federal Reserve to issue rules ensuring that "swipe fees" are reasonable and proportional to the processing costs incurred.

As a senior member of the Banking Committee, Reed crafted several key provisions of S. 3217, the Restoring American Financial Stability Act, including:

Creating a new Office of Financial Research (OFR) that would help provide early financial warnings and allow regulators to act on that information and keep pace with new products being engineered on Wall Street.

Strengthening consumer protections by creating a strong Consumer Financial Protection Bureau (CFPB) and creating a military liaison that can monitor and respond to complaints from military families.

Bringing accountability and transparency to the derivatives markets by overturning the law that prevented regulators from taking any action to regulate this market. It also incorporates strong new rules Senator Reed championed to ensure transparency and stability in these markets.

Closing dangerous loopholes and gaps in financial oversight by requiring advisers to hedge funds to register with the Securities and Exchange Commission (SEC).

Improving the SEC's oversight of credit rating agencies and improving accountability and accuracy within the credit rating industry through a strong new liability provision that allows investors to take action when a rating agency knowingly or recklessly fails to review key information in developing the rating.

Ensuring accountability of the Federal Reserve system by requiring the head of the Federal Reserve Bank of New York to be Presidentially-appointed and Senate confirmed. The bill also includes Senator Reed's proposal to create a new position of Vice Chairman for Supervision at the Board that will be accountable for the Board's oversight responsibilities.