Open letter to Barney Frank regarding “foreign transaction fees”


Congress is racing to get legislation completed that will reset the rules for credit card issuers and many banks. Barney Frank is the Chairman of the Committee on Financial Services and, at this point, the last major legislative figure that can change this almost-finished legislation.

The legislation is good and necessary, however, banks and credit card issuers are already making changes to their fee structure that will circumvent the will of Congress and allow them to keep many fees hidden from the American consumers. As fast as Congress writes the laws, credit card issuers are changing terms to evade the spirit of transparency sought by our representatives.

Foreign transaction fees are one of the biggest loopholes left in this bill that will affect all travelers who travel anywhere internationally. This means Canada, Mexico, the Caribbean or on cruises as well as overseas. Here is a letter I sent to Honorable Barney Frank urging him to shut this loophoe before the final legislation passes.

It is time for concerned travelers to send Congressman Frank a note asking for him to require that foreign transaction fees be clearly stated on credit card statements and be justified.

Clear instructions on how to register your concern with Congressman Frank are here. Plus, here is Congressman Frank’s facebook page where you can write on his wall.


The Honorable Barney Frank
United States House of Representatives

Dear Congressman Frank,

Credit card fees have finally come to the attention of Congress. I applaud you for your work in this area that is so important to American consumers.

Unfortunately, foreign currency exchange fees addressed in the bill being voted on by the Senate and coming to the House for a vote this week, are already being circumvented by the credit card industry. Foreign currency exchange fees, other than the mandated one percent Visa/Mastercard exchange fee have been phased out. The new preferred fee for credit card issuers is “Foreign Transaction Fee.”

Last week I received a notice from the Bank of America that the “foreign transaction fee” was being increased and expanded to include any credit card charge handled by a non-US bank, even transactions completed in U.S. dollars. This redefinition of a fee will allow credit cards to continue to hide their fees and to fleece the American public.

If Congress is serious about limiting fees, the foreign transaction fee should be included clearly in the legislation.

A simple change such as adding it to the foreign currency exchange fee wording would do the trick. Plus, these fees should be clearly listed on credit card billing statements.

The intention of this legislation is to allow the American public to clearly see and understand fees being charged by the credit card issuers. Keeping items such as three and four percent foreign transaction fees hidden defeats much of the purpose of this bill.

I urge you to insert “and foreign transaction fees” immediately following foreign currency exchange fees.

The modified section of the bill would read as follows(changes in bold type):

Section 127 of the Truth in Lending Act (15 U.S.C. 1637) is amended by adding at the end the following:

(o)(3) REASONABLE CURRENCY EXCHANGE FEE AND FOREIGN TRANSACTION FEES- With respect to a credit card account under an open end consumer credit plan, the creditor may impose a fee for exchanging United States currency with foreign currency in an account transaction or processing a foreign transaction only if–

`(A) such fee reasonably reflects the costs incurred by the creditor to perform such currency exchange;

`(B) the creditor discloses on billing statements its method for calculating such fee; and

`(C) the primary Federal regulator of such creditor determines that the method for calculating such fee complies with this paragraph.’.


These small changes will make the bill far more consumer-friendly, especially for anyone traveling internationally to Canada, Mexico, the Caribbean or elsewhere. Plus it would put an end to extra hidden fees imposed whenever a U.S. dollar transaction is conducted by a foreign bank. If there is a rationale for these foreign transaction fees, so be it. However, these fees are capricious — banks charge varying percentages and CapitalOne does not impose such a fee. They are purely a hidden money grab.

I hope that you will move to insert language similar to what I have suggested in order to maintain the spirit of this credit card legislation and to thwart the credit-card-issuer attempt to get around soon-to-be-established legislation.

I would love to have an opportunity to discuss this with you or your staffers.


Charles Leocha
Consumer Travel Alliance

PS: I am a long-time consumer advocate for travelers, author of Travel Rights, a freelancer, former weekend travel guru for MSNBC, co-founder of and of a non-profit, Consumer Travel Alliance. I have just moved to the DC area to begin working more closely with Congress regarding travelers’ affairs.

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  • W.M.

    You said they sent you a letter explaining the fee, but then go on to say it is hidden. What more do you need? Also, my MasterCard statement already clearly states any “Foreign Transaction Fees” incurred.

    Credit cards offer a great service. Instant credit on demand, almost anywhere in the world. How awesome is that? If we don’t like the terms, conditions, or fees, we can always choose to use cash instead.

    No, I don’t work for a credit card company. I’m an American currently living (short term) in Europe. I’ve been able to do this without having to open a European bank account because of the terrific services my bank provides (including M/C).

    I’d rather the federal government reduce the amount it interfered with my finances instead of the opposite. The unintended consequences for this bill will be huge. Keep in mind, Frank’s track record in his post on the Financial Services Committee is pretty dismal. This legislation is not about helping consumers, it is about buying votes.

  • kevin

    I hope this change is inserted, but it won’t be because of my input. I’ve already wasted too much time trying to send an email to Barney Frank. The steps required to send one via the first link are designed for the small group of people from his home state, and the second option requires a Facebook account. Is that all he represents, Massachussets residents and Facebook subscribers? I’m assuming the legislation targets more than just those two groups, so why are the others denied access?

  • Paulette Baker

    I, too, received the notice from BOA about “foreign transaction fees” even if the charge was in U.S. dollars. We all know that ANY such fee imposed by a bank is a scam, since Visa/MasterCard already do the conversion (hence the terminology change by issuing banks from “currency conversion charge” to “foreign transaction fee”). Any and all additional charges imposed by issuing banks are “free money,” since processing such charges costs them absolutely nothing.

    I pay my balances off every month, which makes me a “deadbeat” in credit-card parlance, and I’ve read that banks are planning to change the rules for us responsible CC users so that we’ll be supporting the irresponsible, who will be protected by the new laws.

    I’m sure that at least a few CC issuers (credit unions, perhaps?) will decide against punishing people like me — and that’s where I’ll be moving my business.

  • Geoff

    W.M., you’re an idiot. I guess you like being nickled and dimed to death by the banks? You can’t even make an ATM cash withdrawal from a foreign branch of most American banks without incurring the 3% transaction fee now. How is this fair? I will never understand your dumb comment.

  • Marilyn Long

    I have used Capital One for some time now. They will charge a cash advance fee for withdrawing money from an ATM, but they don’t charge a foreign exchange fee so I don’t believe they will simply add on that transaction fee now. I use my bank’s debit card for withdrawing money. They charge $1.50 for each transaction from an ATM other than their own regardless of what country it is in, but they also do not charge a foreign exchange fee. Then I charge purchases with my Capital One Visa. By following these procedures, I seem to be able to avoid extra fees just for doing business in other countries.

  • http://Firefox Charles Krause

    When buying from overseas I use Paypal when I can, which has no charges and I still get airline miles on my regular card, and when overseas I use several cards with no or 1% charges. To keep these cards active I also use them at home occasionally which simply takes revenue from my regular card provider, and I don’t mind missing a few miles.
    If people would use cards with low fees there wouldn’t be a problem.

  • CRL

    At last, the CRL takes a stance with what resembles a common sense approach; a call to action regarding something to do with the problem. (Now we have to deal with the horsemen, the rain of fire, and the end of days.) The CRL, or Center for Responsible Lending, has taken aim at credit cards by sponsoring HR 627, or the Credit Card Accountability Responsibility and Disclosure Act of 2009. The Credit CARD Act, as it’s called, could ensure more fairness in how card companies deal with customers, and limit things like hidden fees and retroactive interest rate increases. President Obama is on board. The CRL not going after <
    installment loans and targeting an actual predatory lender – it’s about time.

  • W.M.


    It’s really not that complicated. If you are unhappy with a service that you are paying for, stop using it. Find a different bank. That’s how competition works. I can take money out of my checking account via my Debit Card at an ATM in Europe and pay no fees and get the interbank exchange rate. On my credit card, I pay a 1% foreign transaction fee, but still get the good exchange rate, which still makes it cheaper than the exchange desks at the airport.

    You act as if you have no choice in the matter. You do. It disturbs me that people want the government to solve all their problems for them. I can almost guarantee you that this legislation will cause more problems than it solves.

    You say the fees aren’t fare. I say life isn’t fair, and no amount of government intervention is ever going to change that.

    Start taking responsibility for your life instead of whining to the government about everything. I think that is a pretty understandable point of view, even if you disagree with it.

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