NRF Says "Same-As-Cash" In Peril
The National Retail Federation on Thursday asked Congress to overturn recent Federal Reserve regulations that would effectively ban popular "same-as-cash" offers made by retailers on merchandise ranging from furniture to to wedding rings, saying the interest-free finance mechanism is important to cash-strapped consumers during the current recession.
The new regulations don't go into effect until July 1, 2010, but could already affect some deferred interest offers because the length of the agreements can sometimes be two years or more.
"What is important is that every year millions of consumers have access to something that otherwise would be unavailable: interest-free loans," said NRF Senior Vice President Mallory Duncan, who also is general counsel. "Tens of billions of dollars of purchases are made by the customers of NRF members. In a down economy, it is more than unfortunate that the Federal Reserve and banking regulators have seen fit to effectively ban these programs by making them financially (non)viable," he said. "We ask that (Congress) revisit the Fed's recent actions and instead take steps that will improve transparency while preserving one of the genuine consumer benefits in today's pressed financial environment."