June 8, 2011
The Senate vote this afternoon on the Tester Bill to delay the Federal Reserve’s proposed caps for debit card interchange fees failed to get the 60 votes needed for passage, meaning the new limits will take effect on July 21 as scheduled. The final vote was 54-45.
The bill, co-sponsored by Sen. Bob Corker (R-TN) and Sen. Jon Tester (D-MT), suggested postponing implementation of debit swipe fee limits in order to allow for additional examination of the potential impact of the regulation. Just yesterday, Corker acknowledged that the bill likely did not have the votes it would need to pass.
“I realize we don’t have 60 votes in this body to just do away with price-fixing,” Corker told colleagues, according to The Hill. “A lot of people believe that there is a problem, if you will, with an almost monopolistic-type atmosphere as it relates to debit cards in general. “
The senators initially had suggested a two-year deferral of the Fed’s debit plan. The study period was lowered to 15 months and then to six months yesterday in a last-minute effort to gain additional support from lawmakers. The bill also received endorsement the day of the vote from Rep. Barney Frank, the leading Democrat on the House Financial Services Committee.
The Durbin Amendment of the Dodd-Frank financial reform bill instructs the Fed to review debit interchange rules. Sen. Richard Durbin (D-IL), who introduced the amendment, vowed Tuesday to oppose any swipe fee delays.
“This so-called compromise is written by the banks, for the banks, and it has no end date, there is no effective date as to when the rule is issued,” Durbin said in an interview. “There is a guarantee, the way they put it together, that the biggest banks on Wall Street are going to profit from this.”
The Federal Reserve Board staff has proposed two alternatives to debit interchange fee regulation. Both would set a maximum of 12 cents per transaction for debit cards with no apparent distinction between signature and PIN.
PYMNTS.com tomorrow will have exclusive analysis from leading legal and academic experts in the field on the impact of today’s Senate vote.
Lacking Votes, Last-Minute Changes Reportedly Made to Tester Bill
The Durbin Amendment: Myth vs. Reality
Fed Debit Proposal Will Be Reversed, Predicts Financial Sector Official
Risk Management Could Go Out the Window if Durbin Amendment Prevails
Tester Stands Up for Consumers, Offers Debit Card Compromise
How Much Will Durbin Pinch Your Pocket – Recap of New Bank Fees
Durbin Could Deter Mobile Payments, Says AT&T Head
“Dangerous and Irresponsible” to Dismantle Dodd-Frank, Says Head of Senate Banking Committee
Bernanke: Debit Interchange Proposal May Cause Banks to Fail
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