WASHINGTON – Credit union and bank lobbyists hope to convince senators who voted overwhelmingly for last year’s Durbin amendment on debit interchange and may have buyer’s remorse to change their vote and approve a proposed delay.
But the effort won’t be easy and will require at least 20 senators who voted yes last May to change their vote and agree to delay the rule while a broader study of the controversial provision is undertaken.
“We need to convince those who are having second thoughts, buyer’s remorse, to support a delay,” John Magill, chief lobbyist for CUNA, said yesterday after a bipartisan group of senators introduced a bill that would delay implementation of the interchange amendment for two years.
“I think a lot of people who voted yes the first time didn’t expect the draconian rules that the [Federal Reserve] came out with,” said Brad Thaler, senior lobbyist for NAFCU. “They thought community banks and credit unions were going to be protected.”
He was referring to a provision that would apply the price controls only to banks with more than $10 billion in assets – exempting all but three credit unions. But observers all agree the price controls will affect everyone by either forcing exempt organizations to lower their interchange fees or driving more debit business to the large banks.
The math involved in stalling the measure – due to go into effect July 21 – is complicated.
The Durbin amendment passed the Senate by a 64-to-33 vote. Seven of the yes votes and seven of the no votes are no longer in the Senate, leaving 57-to-26.
Senator Richard Durbin, the Illinois Democrat responsible for the debit amendment, is poised to filibuster the bill to delay, meaning advocates will need 60 votes to pass it. That means even if the delay advocates win all 14 new senators, they still would need to convince 20 senators who voted for the Durbin amendment to change their vote, or at least agree to the delay.
As NAFCU’s Thaler pointed out, there are other ways to get the bill passed. The easiest route would be to attach it to a popular bill with support from both parties that could bypass a Durbin filibuster. That could require a simple 51-vote majority of the Senate, a much lower threshold.
Either way, time is running short. “There is a very short calendar,” said Ryan Donovan, senior lobbyist for CUNA. He noted that the Durbin amendment requires the Fed to approve a final rule by April 21, then implement the rule by July 21. But Congress is leaving town next week for a recess, then will follow with two weeks off in April, one week off in May and another in July.
Meantime, a similar bill to delay the Durbin amendment is expected to be introduced in the House as early as today. The House bill would delay implementation for one year.
