Pushing back against what he says is one of the most expensive lobbying efforts by big banks, Senate Majority Whip Richard Durbin (D-Ill.) said today that credit unions and small banks were being used by larger financial institutions.
He said on a conference call organized by supporters of his amendment that those who want to delay the implementation of the rule are trying to erect a smokescreen. He noted that there have already been nine hearings and three Government Accountability Office studies on the subject.
He also noted that all but three credit unions and about 100 small banks would be exempt from the provisions, and accused the big banks of having smaller institutions be the main spokespersons on the issue because the big banks “aren’t the most popular folks,” these days.
Durbin declined to assess the legislative prospects for the effort to delay the implementation of the rule, which is being led by Sen. Jon Tester (D-Mont.), but noted that they will have to come up with 60 votes to get the bill passed, just as he did. Tester has introduced legislation to delay implementation of the Fed’s rule by two years. A companion bill has been introduced in the House by Rep. Shelley Moore Capito (R-W.Va.), which would delay it by one year. Both bills call for a study by financial regulators, including the NCUA.
When asked whether consumers could be guaranteed that retailers would pass on savings from lower fees, Art Potash, CEO of Potash Brothers Market, a three-store grocery chain in Illinois, cited historical trends.
He noted that whenever there have been innovations and cost savings, the profit margins of stores such as his remained constant, which means that consumers usually see lower prices.
According to the proposed rule, the allowable costs for interchange would be limited to no more than the issuer's allowable costs divided by the number of electronic debit transactions on which the issuer received or charged an interchange transaction fee in the calendar year. Or the issuer could receive debit interchange capped at 12 cents per transaction.
According to the provisions of the financial overhaul passed by Congress last year, the final rule must be approved by April 21 and in effect by July 21.
To read the Senate bill, S. 575 or the House bill, H.R 1081, go to: http://thomas.loc.gov