CQ TODAY ONLINE NEWS – BANKING & FINANCIAL SERVICES
June 6, 2011 – 8:02 p.m.
Supporters of Postponing Debit Card Rule Shorten Delay to Win Support
By Ben Weyl, CQ Staff
Lawmakers looking to delay new limits on debit card fees are once again shortening the length of the proposed deferral in the hopes of winning more support just days before the Senate is expected to vote on the matter.
Sen.
Last month, in an effort to gain more support, Corker and
Tester is expected to file the measure as an amendment to economic development legislation (
Asked whether the amendment was likely to get the 60 votes required for adoption, Corker shrugged and quipped, “I am in a whipping mode.”
Reaching 60 votes would mean that some senators would have to switch the votes they cast when the matter first came up, as an amendment to last year’s financial regulatory overhaul (PL 111-203) sponsored by Majority Whip
Senators voted 64-33 to adopt that amendment, which required the Federal Reserve to put the new limits in place.
Corker said his legislation would require the Fed to issue a study on the matter after six months and said it would allow for more flexibility in how the central bank could write the new rules and calculate banks’ costs.
“The way Durbin’s written it, they can only look at marginal costs. They can’t look at things like technology or fraud or any of those things,” Corker said. “The Fed would actually be able to consider all of the costs that go into a card, which would be a much more appropriate way of looking at this.”
Durbin, meanwhile, rejected the latest proposal and urged his colleagues to stand with him.
“This so-called compromise was written by the banks for the banks, and it has no effective date as to when the rule is issued,” he said. “And there is a guarantee that the way they put it together, that the biggest banks on Wall Street are going to profit from this.”
Currently, for each swipe of a debit card, banks charge retailers roughly 1 percent of the purchase price. Banks say the money is used to provide basic banking services to consumers and to fight fraud. Retailers, however, argue that banks have been overcharging for the service.
In December, the Fed proposed capping the fees at 12 cents per swipe. The rule is set to take effect in July, with this week’s floor vote set to serve as the culmination of the fierce lobbying battle between the two industries.
Supporters of Postponing Debit Card Rule Shorten Delay to Win Support
David Harrison contributed to this story.