Senate Votes Down Delay On Swipe Fees
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This is ALL THINGS CONSIDERED from NPR News. I'm Michele Norris.
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There was a dramatic showdown vote on the Senate floor this afternoon, but it wasn't your typical fight between Democrats and Republicans. It was a faceoff between senators backing bankers on one side and the retailers on the other. The retailers won. At issue was a measure to delay a new financial rule on so-called swipe fees.
The rule curbs how much banks can charge merchants on debit card transactions. And as NPR's David Welna reports, the measure fell six votes shy of the 60 it needed to pass.
DAVID WELNA: Nearly a year ago, 64 senators from both parties stunned bankers by approving a last-minute amendment to the Dodd-Frank financial regulatory overhaul. It called on the Fed to regulate the amount banks could charge for purchases made with debit cards. Currently, banks collect on average 44 cents per transaction - the highest rate in the world.
Next month, new Fed rules take effect that could cap the so-called swipe fees at possibly 12 cents a transaction.
So, Tennessee Republican Bob Corker tried heading that off today with a new proposal: to have the Fed study the impact of such regulation for another six months, then spend another half-year writing new rules.
Senator BOB CORKER (Republican, Tennessee): And I know this has been a contentious issue, a vote that candidly a lot of people would just as soon go away because people have friends that are retailers; people have friends that are bankers and they hate, quote, "to choose between their friends."
WELNA: Dick Durbin is the Illinois Democrat who pushed through the measure last year that regulates interchange fees, as swipe fees are also known. Durbin says he's never seen anything like the banks' efforts to overturn that provision.
Senator DICK DURBIN (Democrat, Illinois): They hate this interchange fee regulation like the devil hates holy water, and they have done everything in their power to stop the Federal Reserve from issuing a rule which would bring down this 44-cent charge on every swipe of your plastic debit card.
WELNA: Wyoming Republican Mike Enzi, who sold shoes before coming to Washington, said consumers end up paying those fees in higher prices.
Senator MIKE ENZI (Republican, Wyoming): I asked my colleagues: decide with the stores and their customers, otherwise we'll have just done another bailout for big banks.
Sen. CORKER: This anything but another bank bailout.
WELNA: Corker, the Tennessee Republican, rose to defend his measure.
Sen. CORKER: What this is, is allowing the Fed to rightfully, as they have requested of the United States Senate, to rightfully be able to look at all of the appropriate costs that go into a debit transaction.
Sen. DURBIN: This is a truck-sized loophole the banks are begging for.
WELNA: Democrat Durbin pointed out that the nation's three-largest banks, which collect half the debit card fees, together got $95 billion in the bank bailout.
Sen. DURBIN: well, they're back. They're looking for the second installment on their payment - this time not from taxpayers; this time from consumers and businesses across America.
WELNA: Another Democrat, Montana's Jon Tester, co-sponsored the amendment to delay regulation.
Senator JON TESTER (Democrat, Montana): Look at me. Do I look like a banker?
WELNA: Tester is a portly man with a buzz cut. He warned that small banks could also be forced to charge lower fees, even though the regulation is limited to banks with more than $10 billion in assets.
Sen. TESTER: So, today we can stop and double-check to make sure that that does not happen, or we can just flip a coin and hope for the best and watch as more small banks and credit unions fail.
WELNA: Fifty-three other senators agreed with Tester, including 18 fellow Democrats. But the number of votes his amendment needed to pass was 60, and because a dozen Republicans joined the rest of the Democrats and one independent to oppose it, the new swipe fee law remains intact.
David Welna, NPR News, the Capitol.
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