UPDATED: Senate votes against delaying card swipe fee reform
Casual Living Staff -- Casual Living, June 8, 2011
Matthew Shay, president and CEO of the National Retail Federation, called the Senate's rejection today of the Tester-Corker amendment to delay swipe fee reform "a landmark victory for American consumers."
Last spring, Senator Jon Tester, D-Mont., introduced the Debit Interchange Fee Study Act of 2011, which would have postponed swipe fee reductions included in the Dodd-Frank Wall Street Reform and Consumer Protection Act by two years and require a study of the issue. The swipe fee reductions amendment, sponsored by Senator Richard Durbin (D-Ill.), requires the Federal Reserve to set regulations resulting in "reasonable and proportional" swipe fees for debit cards.
"Congress came to the right conclusion last year - hidden swipe fees charged by big banks have driven up prices far too much for far too long," Shay said. "The National Retail Federation and America's retail merchants commend the Senate for standing by last year's vote and for voting on the side of American consumers."
Durbin told the Senate this week that the delay could amount to an extra $1.3 billion a month to America's 10 largest banks. The banks have spent millions of dollars on lobbying and advertising in the hopes of making that happen.
The National Retail Federation last month launched a major lobbying and media campaign aimed at defeating the banks' effort, and to ensure the new rules take effect July 21st as scheduled.
The swipe fees, officially known as interchange fees, average 1-2% for debit cards and 2-3% for credit cards each time a card is used to pay for a purchase. The fees have tripled over the past decade to about $50 billion a year. Debit cards account for about $20 billion of the total. Congress has yet to deal with credit card swipe fees.