St. Louis and Chicago Papers Clash on Durbin Amendment
The St. Louis Cardinals and Chicago Cubs are among baseball’s most storied rivals. Now the newspapers in their cities are facing off on a key issue: debit interchange.
“Federal lawmakers need to accept that the Durbin amendment will do little for consumers, apart from forcing banks to invent annoying new fees. The only thing better than delaying this government effort to micro-manage the business world would be repealing it altogether,” The Chicago Tribune wrote in an editorial on Friday.
By contrast, the St. Louis Post-Dispatch wrote last Thursday that banks are being disingenuous in making their argument that the amendment would hurt small financial institutions.
“Banks, of course, cannot argue with a straight face that a bill that reduces their allowed transaction profit from 1,100 percent to 300 percent, as Durbin's legislation does, would send them to the poor house. They're arguing instead that allowing more competition in the swipe-fee industry somehow would damage smaller banks. Yes, big bankers are arguing against competition, suggesting that Wall Street reform somehow impedes the free market. Wrap your mind around that one,” the St. Louis Post-Dispatch wrote in an editorial.
Both editorials injected humor to make their case. “Who do these big banks think they are? Airlines? They provide a service and instead of leaving it at that, they go out of their way to make a profit too,” the Tribune wrote.
“Like Swiper, the sneaky fox in the children's television show ‘Dora the Explorer,’ the big banks want to operate without repercussions,” the Post-Dispatch wrote.
The two newspapers are the largest ones in Illinois and Missouri and the St. Louis paper has a large circulation in southern Illinois.
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 bill passed by Congress last year, the final rule must be approved by April 21 and in effect by July 21. Bills have been introduced in the House and Senate to delay the implementation of the proposed rule, which was mandated by an amendment sponsored by Senate Majority Whip Richard Durbin (D-Ill.) to last year’s financial overhaul bill.
To read the Senate bill, S. 575, or the House bill, H.R 1081, go to: http://thomas.loc.gov