The U.S. Senate failed to pass an amendment yesterday that would have delayed the implementation of the Federal Reserve’s debit-card swipe-fee rule, according to Bloomberg.1
Sen. Jon Tester, D-Mont., proposed the delay in an amendment to the Economic Development Revitalization Act of 2011. Senators voted the amendment down 54-45.
The Debit Card Interchange Fees and Routing rule is expected to cap debit-card swipe fees at 12 cents per transaction. The Fed missed its April 21 deadline to complete the rule, which is scheduled to take effect July 21.
The rule springs from a section of the Dodd-Frank Act that added a provision to the Electronic Fund Transfer Act that addresses interchange fees—the fees that debit-card issuers (like banks) charge businesses every time customers swipe debit cards at points of sale.
Under the rule, debit-card issuers whose assets total $10 billion or more would be limited in how much they could charge businesses per debit-card transaction. Currently, the average debit-swipe fee is reported at 44 cents.
The Fed received thousands of public comments on the proposed rule.
Bill Cheney, president and CEO of the Credit Union National Association, expressed CUNA’s concerns about the interchange fee caps.
“Credit unions do not want to charge their members more fees,” Cheney wrote. “However, the result of the loss of interchange-fee income for small issuers and the costs of having to belong to more payment networks will have a horrendous impact on credit unions that offer debit cards and their ability to build net worth.”
Another commenter, a man who identified himself as a “small-business merchant,” wrote, “Please—we small merchants need relief from the never-ending, escalating, debit/credit card fees being imposed on us.”
The proposed rule was published in the Dec. 28, 2010 Federal Register.
Lawmakers who opposed the rule introduced other legislation in the House and Senate in March.
Rep. Shelley Capito, R-W.Va., introduced a bill that would delay the rule. The bill was referred to the House Committee on Financial Services, which referred the bill to the Subcommittee on Financial Institutions and Consumer Credit, according to govtrack.us.
Tester also introduced the Debit Interchange Fee Study Act of 2011, which would “study the market and appropriate regulatory structure for electronic debit card transactions, and for other purposes.” That bill was referred to committee.
For more information, visit:
1. “U.S. Senate Rejects Amendment to Delay Debit Swipe Fee Rule”
2. Notice of Proposed Rulemaking
3. Federal Register