So for key senators, what was the decisive factor in deciding how to vote? The answer, perhaps surprisingly, does not appear to be money. At least not in an obvious way.
As American Banker readers know well, the interchange battle hinged on two key Senate votes. On May 13, 2010, retailers scored a surprise victory when the Senate approved the Durbin Amendment.
Then on June 8, 2011, the retailers successfully repelled a counterattack by the banks when the Tester Amendment fell short of the 60 votes that were needed.
In between, 12 senators – nine Democrats and three Republicans – switched sides. All 12 switched their votes from the position favored by retailers to the stance supported by banks. These senators did not flip-flop exactly – their first vote was to impose fee caps, and their second vote was to delay the implementation of caps proposed by the regulators – but they did switch sides on a high-stakes issue.
What caused the 12 senators to switch? With a huge assist from the Center for Responsive Politics, I analyzed campaign contributions from retailers and banks to the 12 vote-switchers both before and after the passage of the Durbin Amendment in May 2010.
The results show that the role of money in politics is more subtle than it is often portrayed. For the analysis, I looked at campaign contributions during two periods of time: the 13 months prior to the vote on the Durbin Amendment, and the 13 months after that vote, a period that ended a few days after the vote on the Tester Amendment.
I relied on industry categories that the Center for Responsive Politics uses to track the source of campaign contributions. The retailers included were food stores, drug stores, restaurants and bars, apparel and clothing stores, consumer electronics and computer stores, furniture and appliance stores, and department, variety and convenience stores. The financial institutions included commercial banks, savings & loans, credit unions, and credit agencies and finance companies.
If the senators switched sides largely because of campaign contributions, you would expect to find that they got a flood of cash from the banks after their pro-retailer votes in 2010. But that’s not what happened.
Here is what I found:
Overall, in terms of campaign contributions to these 12 senators, the banks outspent the retailers during both periods of time. But the spending gap closed actually from $221,000 before the vote on the Durbin Amendment to $67,000 after that vote.
And in the case of six senators –Begich, Bennet, Gillibrand, Hagan, Mikulski and Wicker – the retailers actually outspent the banks after the vote on the Durbin Amendment. And yet all six voted with the banks in 2011.
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