WASHINGTON — A House Republican and Democrat on Wednesday introduced legislation to repeal the Durbin Amendment, but it was unclear whether the move would lead to a serious new push in Congress against the cap on debit card interchange fees.
The legislation — sponsored by Reps. Jason Chaffetz, R-Utah, and Bill Owens, D-N.Y. — goes further than a bill sponsored by Sen. Jon Tester, D-Mont., which failed in the Senate earlier this year.
The Chaffetz-Owens bill would repeal the cap on debit interchange fees altogether, whereas Tester's bill sought only to delay the Federal Reserve Board's implementation of the cap.
Given that the Tester Amendment fell six votes short of the 60 needed for approval in the Senate, despite a massive lobbying campaign that pitted banks against retailers, the new House bill seems likely to face an uphill fight in the upper chamber.
But during a conference call with reporters, Chaffetz and Owens said they are optimistic that their bill will gain momentum as consumers begin to see the consequences of the new price cap.
They noted, for example, that banks have begun to impose fees on their retail customers as a way to recoup lost revenue. They also predicted that bank rewards programs will be scaled back.
"I think as banks attempt to recoup the revenue, I think pressure is going to build," Owens said.
"I would remain optimistic that the bill will actually pass," Chaffetz commented, before adding: "We can only fight in the House and do what we think is right."
The cap on debit interchange fees took effect on Oct. 1. Interchange fees, which previously averaged 44 cents per transaction, are now capped at around 26 cents.
Among bank lobbyists, the defeat of the Tester Amendment in June led to pessimism about the short-term prospects of repealing the fee cap.
Sen. Richard Durbin, D-Ill., the author of the cap, shows no signs of backing down on the issue.
While opponents of the cap blame Durbin for the new fees that banks are charging their customers, Durbin argues that such fees will generate more money for the banks than the interchange fee revenue that those banks are losing.