Retailers — led by Walmart — seem to have beaten back an attempt to raise swipe fees, according to Congressional aides speaking to Bloomberg.
Despite vigorous lobbying from the finance industry, House Republicans working to reform and repeal large sections of Dodd-Frank have concluded they don’t have the votes necessary to make the changes happen if they attempt to remove the Durbin amendment, which limits swipe fees.
Banks particularly like the caps for the billions in revenue they say the limits have cost them — but retailers have aggressively counter-lobbied that their businesses would be harmed without the limits Durbin created.
The decision to leave Durbin alone will reportedly clear a path for a full House vote on the Dodd-Frank revamp within the next month, according to the aid.
The issue has been thorny for lawmakers as they find themselves lodged between the rock that is retailers like Walmart — and the hard place that is banks like JP Morgan Chase.
Visa and Mastercard set the debit card fees — but the funds from them mostly flow to banks. According to Goldman Sachs, Durbin has cost lenders about $9 billion in fees.
But according to internal sources, after an internal vote count, House Republicans found that scrapping Durbin would derail Hensarling’s Financial Choice Act — which aims to broadly scale back the Dodd-Frank financial reforms passed in the wake of the crisis.
“I’ve said before that repeal of the Durbin amendment was the most contentious part of the bill among Republicans,” Hensarling said in a statement. “We won’t let this one provision hinder passage of an important-priority bill that will end bank bailouts and help renew economic growth for all Americans.”
The American Bankers Association, a lobbying group for the financial services industry, has noted that it is not yet ready to quit this fight.
“This is unfortunate, but certainly not the end of this debate,” James Ballentine, an ABA executive vice president, said in a memo sent to banks. The group will “continue to work with and educate members who are interested in removing this language.”
The debate, however, may be purely academic, since the bill faces very long odds in the Senate — where different procedural rules, and a smaller margin between Democrats and Republicans, makes it unlikely the bill will draw the minimal bipartisan support it needs to get through the upper chamber. Senate Majority Leader Mitch McConnell has said he does not believe the Financial Choice Act will pass through the Senate.