Retailers made a good enough case last summer that interchange (AKA swipe) fees charged by banks to process debit card transactions were excessive that an amendment from Senator Dick Durbin of Illinois was included in the Dodd-Frank financial reform legislation that passed Congress. But, as they say, that was then and this is now.
Yesterday, Senator Jon Tester of Montana told The Wall Street Journal that he believed he had enough votes to delay the rule capping fees for two years. Sen. Tester's measure has 16 co-sponsors, with members of both parties, that would delay the Durbin amendment to give Congress more time to study and, presumably, change it. Similar legislation by Barney Frank of Massachusetts has been introduced in the House.
According to a piece on the Huffington Post site, Rep. Frank said, "The Federal Reserve's announcement that they cannot meet the deadline on interchange fees confirms my view that this is the only part of the financial reform bill that needs to be amended. For this reason, I support legislative action to postpone the deadline so that we can revisit it."
The Federal Reserve announced that it could not meet the April 21 deadline to finalize regulations for the amendment capping fees at 12 cents down from the previous 44 cents charged by banks. The actual switch in interchange fees would have gone into effect on July 21.
"We all know that in Congress 'study' is a euphemism for 'kill,'" Mallory Duncan, senior vice president and general counsel for the National Retail Federation (NRF), said earlier this week. "Congress has done the right thing in passing swipe fee reform. What we need to do is remind them of that."
A NRF press release said no further study of the amendment is needed, pointing out that "Congress held seven hearings and ordered two Government Accountability Office studies before enacting swipe fee reform last year."
Banks, led by JPMorgan Chase, have been pushing for the bill to be altered if not thrown out altogether.
Jamie Dimon, chairman and CEO of JPMorgan, has said the Durbin amendment "was passed in the middle of the night with no facts, no analysis and Congress had to vote on it, and it had nothing to do with the crisis."
- Our view: In 'swipe fees' fight, retailers make better case - USA Today
- Senator Targets Debit-Card Swipe Rule - The Wall Street Journal
- Rep. Barney Frank Pledges To Revise Dodd-Frank's 'Swipe Fee' Provision - The Huffington Post
- Merchants on Capitol Hill Today to Fight Delay of Swipe Fee Reform - National Retail Federation