A bipartisan group “of senators introduced a bill on Tuesday that would delay a new federal regulation to lower the swipe fees that banks could charge merchants for processing debit card transactions,” the New York Times reports.
Although there is growing uneasiness with the regulation, it is not at all clear the senators will succeed in upending the law, which easily passed the Senate last year and was a cause championed by a leading Democrat.
The latest bill, introduced Tuesday by nine senators led by Senator Jon Tester, a Democrat from Montana, calls for a two-year delay and a one-year study during that period of the effect of the proposed limits on debit fees.
The Dodd-Frank financial regulation bill, which became law last summer, directed the Federal Reserve Bank to determine the limits in April and put them into effect in July.
The proposed rules have faced complaints and heavy lobbying from banks, credit unions and credit card companies, which say that cutting and capping fees mean that the fees will fail to cover the cost of processing the transactions and accounting for fraud.
The Federal Reserve proposed cutting the fees to 12 cents a transaction, down from the current average of 44 cents a transaction.
Processing fees on debit and prepaid cards totaled $20.5 billion last year, according to the Nilson Report, a research firm.
A press release announcing the Debit Interchange Fee Study Act notes that Senators Bob Corker (R-TN), Jon Kyl (R-AZ), Ben Nelson (D-NE), Tom Carper (D-DE), Pat Roberts (R-KS), Chris Coons (D-DE), Mike Lee (R-UT) and Pat Toomey (R-PA) joined Tester in introducing the measure.
According to the New York Times, five of the “senators who co-sponsored Tuesday’s legislation opposed the debit fee limits when Senator Richard J. Durbin of Illinois pushed the original legislation through the Senate last year.”
However, Mr. Durbin’s support, along with the fact that his measure passed on a lopsided 64-33 vote last May, means that the nine senators could face an uphill battle to win enough votes to pass. Only one co-sponsor voted in favor of the amendment, and the other three co-sponsors were not Senate members at the time.
Wonk Room says Senator Ben Nelson is the member who originally supported the Durbin measure.