Rep. Barney Frank (D-MA), one of the chief authors of the Dodd-Frank financial overhaul legislation, has been openly critical of the Federal Reverse’s initial plan to cap debit card interchange fees in response to the bill’s Durbin Amendment. Now, Bloomberg reports that Frank’s desire to change the proposal has him ready to reach across the aisle and work with likeminded Republicans in the newly GOP-controlled House of Representatives.
“If they want to do something on it, I’ll work with them,” Frank said in an interview Wednesday, referring to Republicans on House Financial Services Committee, of which he used to be the leader. (Related Article: Dodd-Frank Chief Author Opposed to Fed’s Initial Debit Proposal)
The Bloomberg report stated that Frank’s comments were “the strongest indication to date that there may be a bipartisan effort on legislative changes to the section of the Dodd-Frank law that instructs the Fed to set the limits.”
After Frank’s statement, Visa and MasterCard jumped to their peak levels for the day in New York Stock Exchange composite trading. On Dec. 16, when the Fed’s preliminary debit proposal was released, both companies fell more than 10 percent, according to Bloomberg.
The Fed’s two suggestions in response to Durbin both have a limit of 12 cents per transaction for signature and PIN.
Last month, Frank expressed concern during a CNBC interview that card companies would have trouble covering the total cost of debit transactions under Fed’s plan. Another result could be the annual reduction of more than $12 billion in revenue for U.S. banks, according to Bloomberg.
Uniting with Republicans to change the Fed’s debit plan for Frank would mean working with man who replaced him as Financial Services chairman, Rep. Spencer Bachus, (R-Ala.). Bachus recently told CNBC that he wants to reassess Dodd-Frank “piece by piece-provision by provision.” (Related Article: Will the GOP Attempt to Repeal Dodd-Frank?)
At the same time, Bloomberg reports Frank’s new comments could pit him against “the second-ranked Democrat in the Senate, Senator Richard Durbin of Illinois, who wrote the interchange language included in Dodd-Frank… had pushed to expand the rule to include credit cards.”
To read more about the Durbin camp’s reaction to the potential bipartisan alliance to alter the debit interchange amendment, click here.