Swipe Fee Battle Continues
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."
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."
by JPMorgan Chase, have been pushing for the bill to be altered if not thrown
Jamie Dimon, chairman and CEO of JPMorgan, has said the Durbin
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
Barney Frank Pledges To Revise Dodd-Frank’s ‘Swipe Fee’ Provision – The
- Merchants on Capitol Hill Today to Fight Delay of Swipe Fee Reform – National
Discussion Questions: Is there any benefit to consumers in Congress delaying implementation of the Durbin amendment? What benefits do you expect consumers to see as a result of the cap on interchange fees?