Retailers, Financial Institutions Go Local in Debit Card Fee Fight
You wouldn’t expect Davie County, N.C. to be the center of a high stakes political battle.
And you wouldn’t think that freshman Rep. Ted Budd (R-N.C.), a small business owner who still lives on the farm on which he was raised, would be the target of intense lobbying and blunt advertising campaigns by industry behemoths.
The National Retail Federation and the Electronic Payments Coalition, which includes credit union groups and other card issuers, are running advertisements in several congressional districts arguing opposite sides of the issue.
The House Financial Services Committee has approved legislation that would repeal the Durbin Amendment to the Dodd-Frank Act. The amendment, named after its sponsor, Sen. Richard Durbin, caps interchange fees.
Opponents of the repeal—including some Republicans—have made it clear they would like the full House to vote on the repeal.
Budd has been an outspoken supporter of the repeal and may be difficult to sway.
But that hasn’t stopped the retail federation from trying.
“Repeal would allow the monopolistic practices of the past to come back and allow the banks to start increasing these fees – and the prices paid by consumers – again, said NRF Senior Vice President for Government Relations David French. “We want voters to know what is at stake.”
The NRF started its latest effort in Budd’s district, with radio ads that say that the Durbin amendment has saved consumers $6 billion a year.
The ads end by asking listeners to contact Budd and tell him to “stop being a pawn for the banks and protect swipe fee reform.”
The NRF is expanding its effort into other congressional districts, with full-page newspapers ads and online digital ads.
Those ads tell consumers, “Don’t let big banks take your money.”
On the other side of the issue, the Electronic Payments Coalition is running a digital ad campaign in Washington and other advertising in key congressional districts. Those districts include Budd’s, and the districts represented by House Financial Services Chairman Jeb Hensarling (R-Texas) and Financial Institutions and Consumer Credit Subcommittee Chairman Blaine Luetkemeyer (R-Mo.).
One digital ad argues that the consumer got “screwed” by the Durbin amendment and the second is an animated video on the need to repeal the Durbin Amendment.
“The retailers should be ashamed of themselves for grossly misleading voters, just like they misled the American public about the phantom savings they promised to pass along to consumers when the Durbin Amendment became law,” said Molly Wilkinson, executive director of the Electronic Payments Coalition. “We are doing everything in our power to remind people how much this law hurts small businesses and consumers.”
Credit union groups are lobbying individual members, arguing that the Durbin amendment should be repealed.
“Retailers see that momentum is on the side of the financial services industry,” said Brad Thaler, NAFCU’s vice president of legislative affairs.” “We had a significant victory when it was reported out of committee.”
CUNA and state credit union leagues have issued an action alert urging stakeholders to write to members of Congress to support the repeal of the amendment.