The Wall Street Journal has the latest in the swipe fee debate. HiffPost Hill calls it a compromise, while retailers still call it a handout to big banks.
In a bid to sign up more supporters for a bill to delay the new rule, the Montana Democrat said on the Senate floor that more time is needed to study the matter and put a new rule into practice . Mr. Tester’s revisions would allow six months for a study, six months for the Fed to rewrite its rule based on the study’s findings and three months to put it into effect. That, said Mr. Tester. is “the bare minimum to get this study right.”
Under last year’s Dodd-Frank financial overhaul law, the new rule must be adopted by the Federal Reserve by July 21; it would cap the so-called swipe fees that banks charge retailers each time a consumer uses a debit-card. The Fed’s draft proposal capped the fees at 12 cents per transaction, which is down from a current average of 44 cents.
WashPost: Retailers Fight Back
The retail industry launched a new campaign Wednesday to protect a federal law that reduces the fees retailers must pay to banks every time a debit card is swiped, a move the industry hopes will blunt the massive lobbying attack from banks.
Sen. Jon Tester (D-Mont.), who sponsored one of the bills, said Wednesday that he is willing to shorten the proposed delay from two years to 15 months. That timeframe — which Tester called the “bare minimum” — would allow for six months to study the law, six months for regulators to draft new rules and three months for banks to implement them.
“I’m asking that we take a closer look so we can get the information to understand the impacts both intended and unintended,” he said.
Wait a minute. He thinks we need to take a closer look so we understand the consequences? I thought he said this was going to force small banks out of business? So why is he merely asking for a delay instead of fighting it altogether? Oh yeah, that’s right. He voted for it last year.
HuffPost Hill calls it a compromise:
TESTER OFFERS SWIPE FEE COMPROMISE – The swipe fee debate continued to play out according to the script today. Jon Tester put forward a “compromise” that would reduce his proposed delay of debit fee caps from 24 to 15 months, but throws in a few extra changes the banks want. Harry Reid came out against it but promised Tester a vote. John Boehner tweeted his support for the banks. On HuffPost, the banks now have ads targeting Bob Casey, so something’s up with that.
But the Merchant Payments Coalition added this:
“What the Senator wants to do is take the big banks’ talking points and codify them into law,” said Lyle Beckwith, Senior Vice President of Government Relations at the National Association of Convenience Stores. “This isn’t a compromise. This is an abdication of good policy, a handout to the big banks and a betrayal of small businesses and their customers.”
The new proposal, which Senator Tester tries to sell as a “compromise”, is in fact a giveaway to the country’s biggest banks that views small business owners as collateral damage.
The adapted bill would reduce the swipe fee delay period from 24 to 15 months and would require the Federal Reserve to automatically re-write its rules based upon a skewed study that is straight out of the talking points of the banking industry.