Senate Majority Leader Harry Reid Will Oppose Delay of Durbin Amendment
Saying that it would be unfair to small businesses to not have more regulation of debit interchange fees, Senate Majority Leader Harry Reid said he will oppose any efforts to delay implementation of the Durbin Amendment but might allow a vote on the issue.
Reid has promised a vote on the amendment proposed by Sen. Jon Tester (D-Mont.) to delay by two years the effective date of a Federal Reserve rule regulating debit interchange fees.
Reid supported the Durbin Amendment to the financial overhaul bill last year as did most Senate Democrats. The amendment passed 64-33.
It hasn’t been determined what bill the Tester amendment would be attached to but several financial services lobbying sources said they don’t expect a vote to happen until next week at the earliest.
The amendment needs 60 votes to overcome a filibuster that Durbin has said he would mount against the amendment. Without the filibuster, the amendment would need 51 votes in the 100-member chamber.
Tester at one point said he had the 60 votes. But more recently a spokeswoman said simply they expect to have the votes when the vote takes place.
Credit unions and banks have been pushing Tester’s amendment, which would call for a study of the issue by financial regulators including the NCUA, because they contend that the fee limits in the proposed Fed rule don’t cover costs for fraud prevention.
They also express concern that the provisions aimed at protecting small-card issuers aren’t workable and that merchants would discriminate against cards from those issuers because they would have to pay higher fees.
The Fed issued a draft rule in December and was supposed to issue a final rule next month but has been delayed in doing so because it is still going through the large number of comments it received on the proposal.
The final rule is supposed to take effect in July. Acording 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.