Industry Players Step Up Pressure on Wall Street Bill
With the Senate-House conference on financial regulatory reform less than two days away, the banking industry is upping the ante inside the halls of Congress to press for changes to the final bill.
The lobbying battle over interchange or “swipe” fees is taking center stage with both retailers and merchants loudly working the public relations front and Members of Congress. But big banks and industry trade groups are also aggressively lobbying behind the scenes on derivatives, proprietary trading and consumer protections.
“On one level executives are calling to talk about six issues, so it’s a very efficient use of time,” said one financial services industry executive, who spoke on condition of anonymity.
Financial industry lobbyists said they are happy to have the interchange fee take top billing, so they can continue to press Congress on other priorities outside the spotlight.
And just because President Barack Obama and Democrats have made vilifying financial services lobbying a key part of their strategy to push the bill forward doesn’t mean K Street is disappearing from the debate.
“It isn’t stopping anybody from getting anything done,” the industry executive said.
In addition to focusing on conferees, K Street is also lobbying Republican Senators such as Susan Collins (Maine) and Scott Brown (Mass.), who voted for the bill, and Charles Grassley (Iowa), who has been in talks with the White House over certain provisions, according to a financial services lobbyist who also asked not to be named.
Industry representatives say the tit-for-tat lobbying battle between merchants and retailers on the interchange amendment that Sen. Dick Durbin sponsored is getting major billing because it galvanizes the entire banking industry, from small banks to large commercial banks and credit card companies.
The Illinois Democrat’s amendment gives the Federal Reserve more power to negotiate the rates that banks require merchants to pay when customers use debit and credit cards. The legislation also allows merchants to negotiate discounts with consumers when using certain payment cards.
Independent community bankers and credit unions have been openly sparring over the past few weeks with Durbin.
But Durbin has contended that credit card companies are bullying small banks and credit unions to oppose the bill and that a measure in the amendment that would exempt financial institutions with less than $10 billion in assets would protect those smaller institutions. Further, Durbin sent a missive late last month to Visa and Mastercard contending that coordination with “each other or with your largest member banks to make changes to your fees and rules” would raise serious antitrust questions.
Independent Community Bankers of America’s Steve Verdier said he isn’t worried about Durbin’s comments.
“Sen. Durbin made his comments on the restraint of trade,” Verdier said. “The last time I checked, the First Amendment trumped those concerns.”
In addition to community bankers storming Capitol Hill, the Credit Union National Association and the National Association of Federal Credit Unions are both aggressively engaged in a public relations and lobbying campaign to help sway conferees to vote against the measure.
CUNA’s John Magill said the effort is “100 percent” focused on getting interchange removed from the bill.
ICBA would like to see interchange disappear, but if that isn’t possible, Verdier said the group is supportive of changes to the provision.