Trade Groups Will Grade Senators on Durbin Interchange’ Amendment
The highly contentious lobbying battle between merchants and banks over Sen. Dick Durbin’s (D-Ill.) amendment on “interchange fees” is reaching new heights, as several trade groups are planning to declare the measure a “key vote” for their membership.
Credit Union National Association and the National Association of Federal Credit Unions, which often stake out different positions on legislation, are both set to declare the amendment a key vote for the purpose of determining who their true allies are in the Senate.
Credit unions and banks are opposed to the Durbin language that would allow the Federal Reserve to regulate the fees banks and card companies charge merchants to process credit and debit card transactions — called interchange fees.
The amendment to the financial regulatory reform bill, which is expected to be debated Thursday, would also allow merchants to offer discounts to customers based on their payment method. Interchange fees have never before been voted on in the Senate.
CUNA President Dan Mica said the bill would be detrimental to how credit unions do business, and the group is taking an extraordinary step in making the bill a key vote.
“CUNA has taken less than a dozen key votes on legislation in the last 12 years,” Mica said in a statement. “If the Senate adopts amendments offered by Sen. Durbin on interchange, credit unions will have no choice but to vigorously oppose the financial regulatory reform bill in its current form.”
NAFCU President Fred Becker sent a blast e-mail late Thursday afternoon after Durbin made a floor statement promoting the amendment.
“In spite of the Senator’s comments, the Durbin Amendment will not just have an impact on small merchants and big banks — it will also allow giant retailers and big box stores to line their own pockets at the expense of small banks and credit unions,” Becker wrote. “Even if institutions under $10 billion in assets are exempted,’ merchants will discriminate against or refuse credit union cards in favor of price-controlled large institution products, which will be more profitable, and there is nothing in the bill to prevent this.”
Durbin has been leading the charge against big banks and major credit and debit card providers who have a lock on the business.
His allies, including small merchants, are vigorously lobbying in favor of the bill and also plan to score the vote for their association members.
The Food Marketing Institute, the National Association of Convenience Stores and the National Retail Federation are all in favor of the amendment and are also making it a key vote.
“Plastic checks — debit cards — formerly passed at face value, but now the biggest banks and card companies are using them to circumvent the system and are reducing the face value of debit card transactions through higher fees,” NRF’s Steve Pfister said in a statement. “This hurts retailers and merchants of all sizes, including doctors’ offices, restaurants and florists, and it causes all of our customers to pay more.”