April 29, 2011
The payments community’s favorite soap opera returns next week when Congress is once again called to order on Capitol Hill. Before we look ahead to the “new season,” let’s first recap where we last left off with some of the main “characters.”
Benjamin Bernanke (Federal Reserve Chairman): Last month, Federal Reserve Chairman Benjamin Bernanke told Congress that the Federal Reserve would be unable to meet the April 21 deadline for a finalized debit interchange proposal, as mandated by the Dodd-Frank financial reform bill’s Durbin amendment. Bernanke told lawmakers the Fed needed more time to review the deluge of public comments that had been submitted. He did assure Congress that the Fed will meet the July 21 deadline for imposing the rules. Yet Bernanke wasn’t the only one asking for me time.
Sen. Jon Tester (D- MT): A bipartisan group of nine Senators led by Sen. Tester introduced the “Debit Interchange Fee Study Act of 2011,” which seeks to delay implementation of the Fed’s debit swipe fee proposal for about two years in order to allow for further study of the issue. Washington insiders last week speculated that Tester’s bill is still a few votes shy of the 60 that it would need to pass in the Senate.
Rep. Shelley Moore Capito (R-WV): The GOP representative from West Virginia 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.
And last, but certainly not least…
Sen. Richard Durbin (D-IL): Congress may have been on recess, but there no vacation for the author of the controversial amendment. Just last week, Sen. Durbin responded to yet another letter from the American Bankers Association, proclaiming that lobbying by the financial sector would not silence the support of those eager to see new debit swipe fee rules. Earlier, in an interview with Bloomberg Television, Sen. Durbin also argued against measures that would delay implementation of the Federal Reserve’s debit interchange proposal. He told the network that “an attempt to delay the Federal Reserve issuing a rule to delay the interchange fee is an attempt to make certain that these credit card companies and banks can continue to receive $1.3 billion a month in interchange fees that they impose on merchants and consumers.”
And in one of the soap opera’s major subplots, TCF Bank earlier this month requested an expedited ruling from the Eighth U.S. Circuit Court of Appeals in St. Louis regarding their lawsuit questioning the constitutionality of the Durbin Amendment.
Obviously, the show has left “viewers” in suspense ahead of these upcoming, new episodes. Some of the major questions we’re all wondering: does either the bill by Sen. Tester or Rep. Capito stand a chance of passing? Will lawmakers’ hearts be won over by the impassioned anti-Durbin pleas of Wall Street and major financial firms? (Their lobbying expenditures reached record levels in Q1 of this year.) Or will merchants and other debit interchange reform supporters emerge the winners in this storyline? All we can say is… stay tuned!
SPECIAL NOTE: Other favorites also returning to primetime next week include “Who Wants to Be Director of the Consumer Financial Protection Bureau?” and “Elizabeth Warren vs. House Lawmakers – The Final Showdown.”
Durbin’s Next Target: eCommerce Regulation
Will Tester’s Bill to Delay Debit Swipe Fee Reform Pass? Experts Offer Predictions
Financial Sector’s Lobbying Fees for Q1 2011 Second-Highest Eve
TCF Seeks Speedy Decision in Durbin Appeal
Video: Tester- “Measure twice, cut once” – Interchange overhaul needs full study
Restaurateurs Call on Congress to Fight Big Banks’ Tactics to Halt Debit-Card Swipe Fee Reform
Letter to JPMorgan Chase CEO Jamie Dimon Regarding Interchange Fees
Facebook, Apple, Microsoft, Google and More Unite to Fight Debit Swipe Fee Caps
NAACP Director: Group’s Stance on Durbin was “Misinterpreted”
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