Sen. Jon Tester succeeded in bringing legislation to the floor that would undo a policy on how banks charge retailers when consumers use bank cards. It was approved as part of the Dodd-Frank financial reform legislation.
Tester’s amendment does not have an effective date, so regulation could be delayed far longer than 12 months, Durbin warned. And many expenses — including those bonuses — could be used to justify higher swipe fees, he said.
Those fees now average 44 cents per transaction — far higher than the cost of processing and the cost charged in other countries, Durbin said.
But an aide for a Senate Democrat backing Tester said the issue has been unfairly pitched as a battle between big banks and consumers.
“It’s very easy to demagogue this and say that big bad banks are charging too much and this is why your prices are high at Walmart,” the aide said. But cutting the interchange fee doesn’t necessarily mean consumers will pay less.
“They can talk about consumers all they want to, but this is about [the retailers’] bottom line,” the aide said. “Last time I checked, Walmart is not run by populists.”
Corker acknowledged that Senators in both parties are uncomfortable taking sides between their “friends” in banking and retail. However, he sought to convince Members to support the amendment as a “one vote solution” that would put the issue behind them.
But even if the amendment passes, it has a tricky road to reach the president’s desk before the new regulations take effect at the end of July. There’s no guarantee that the House will swallow the underlying bill or that President Barack Obama will sign it. And opponents warn it could open the door to relitigating the rest of the Dodd-Frank financial reform law, piece by piece.
The vote total, meanwhile, remains very much up in the air. Many Democrats and Republicans who voted for the Durbin amendment told Roll Call on Tuesday that they are still undecided. Several, including Sens. Sherrod Brown (D-Ohio) and Susan Collins (R-Maine), said they opposed an earlier Tester amendment that would have delayed the regulations for two years but are weighing whether to support the latest revision.
And Sens. Michael Bennet (D-Colo.), Kay Hagan (D-N.C.) and Mike Crapo (R-Idaho) — all of whom backed Durbin last year — have now co-sponsored the latest Tester bid.
The Durbin amendment passed last year on a 64-33 vote, and 56 of those supporters remain in the Senate. Tester and the banks will have to flip at least 16 votes to win.
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