WASHINGTON – Senator Dick Durbin insisted yesterday he will fight every effort to delay the pending implementation of his initiative to lower interchange fees paid to credit unions and banks.
“Last year Congress passed common sense legislation to protect small businesses and consumers from the fees charged by big banks and credit card companies on debit card purchases,” the Illinois Democrat told a crowd of 100 merchants at rally yesterday in the pouring rain outside the Capitol. “I’ll continue to stand with small business owners as we fight Wall Street’s desperate attempts to block reforms from going into effect.”
Later, Durbin took the Senate floor and blasted the withering lobbying being waged by credit unions and banks, saying credit unions and community banks are acting as the public faces--he called them the "beards"--for Visa, MasterCard and the big banks, who are very unpopular on Capitol Hill. "Visa and MasterCard don't dare raise their heads on Capitol Hill" because they are so politically unpopular, which prevents them lobbying directly, he said.
Big Wall Street banks that dominate the debit cards market suffer from the same problem, he said. "So what do they do? They have beards ... Their agents are the credit unions and community banks," Durbin said.Yesterday’s remarks came as both Democratic and Republican Senate colleagues of Durbin are collecting names on a bill that would delay implementation of the interchange rules for as long as two years while the Federal Reserve studies its impact. But any bill in the Senate will probably need at least 60 votes to pass to overcome an expected filibuster by Sen. Durbin."Visa and MasterCard don't dare raise their heads on Capitol Hill" because they are so politically unpopular, which prevents them lobbying directly, he said."Visa and MasterCard don't dare raise their heads on Capitol Hill" because they are so politically unpopular, which prevents them lobbying directly, he said.Yesterday’s remarks came as both Democratic and Republican Senate colleagues of Durbin are collecting names on a bill that would delay implementation of the interchange rule for as long as two years while the Federal Reserve studies its impact. But any bill in the Senate probably will need at least 60 votes to pass to overcome an expected filibuster by Sen. Durbin.Meantime, the focus of the massive fight over the interchange amendment switches briefly today to the federal courts, where credit union and bank groups will submit a brief in support of Minnesota’s TCF Bank seeking to overturn the Durbin amendment. The groups, including CUNA, NAFCU, the American Bankers Association, Independent Community Bankers Association and Consumer Bankers Association, will argue that the Federal Reserve in drafting a final rule is misinterpreting the Durbin amendment language, which requires “reasonable” and “proportional” debit fees, not hard limits, as the Fed is proposing.
The stakes in this commercial battle are huge: an estimated $20 billion a year in debit fees, with as much as $2.5 billion of it going to credit unions.
The court case is turning out to be a replay of the Fed’s comment process, with credit unions and bankers, along with the Electronic Payments Coalition, filing opposing briefs with the Merchants Payments Coalition, made up of retailers across the country.
Both the Senate and the House are expected to introduce bills to stall the Durbin amendment as soon as next week, but time is running short to debate the bills. The Durbin amendment requires the Fed to pass a final rule by April 21 and implement it by July 21.
