April 25, 2011
The majority of industry insiders believe Sen. Jon Tester’s legislation to postpone the Federal Reverse’s new debit interchange rules is presently just short of the 60 votes needed to secure its passage, according to American Banker.
A bipartisan group of nine Senators led by Sen. Tester introduced the “Debit Interchange Fee Study Act of 2011” last month. The act seeks to defer the Fed’s debit proposal for approximately two years in order to allow time for the impact of debit interchange limits to be further studied.
American Banker reports that while Sen. Jon Tester (D-MT) claims to have the 60 votes locked up, most with knowledge of the situation say he only has about 55 votes secured. Sixty-four senators voted to include the Durbin Amendment in the Dodd-Frank financial reform bill, meaning some lawmakers would need to have a change of heart in order for a delay to pass.
Another challenge facing Sen. Tester (D-MT) is that he must attach the proposal to a bill up for vote that will be enacted before the Fed’s debit swipe fee regulation goes into effect on July 21. Industry experts offered their thoughts on whether Tester’s proposal would succeed:
Ryan Donovan, vice president of legislative affairs for the Credit Union National Association
“We may think we have three months, but when you look at the amount of time the Senate and House will be in session between now and July, it is broken up by three weeks, and there is little certainty what bills will be offered. So we need to a) get the votes and find the vehicle to attach it to by July 21. That’s going to be a difficult challenge to overcome.”Richard Hunt, president of the Consumer Bankers Association
“I still think odds are improving every day. I know the vote count is going up. I also know there is some concentration among some senators between one-year or a two-year delay. … Those who voted for the Durbin amendment would prefer a one-year delay with a trigger, but if you do a one-year you may lose some votes.”Mark Calabria, director of financial regulations studies at the Cato Institute
“The thing working for the retailers and working against the banks is the clock. If this doesn’t get done by July it makes it harder to do, but not impossible to do. You could see this get implemented and you see disruptions in the debit card market, and then something happens. … Implementing this thing is going to be the test.”Dan Berger, senior vice president for government affairs for the National Association of Federal Credit Unions
“Though historically a difficult threshold, we believe momentum continues to grow on delaying and studying the price-cap rule.”
Rep. Shelley Moore Capito, R-W.Va., has also put forth a bill relating to Durbin. The bill would defer the Fed’s debit proposal for one year and allow the Federal Deposit Insurance Corp. and other financial regulators more authority to change the final regulation.
Click here to read more on Tester’s efforts to secure support for his legislation.
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