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The fight over the interchange amendment heated up on Wednesday when Sen. Dick Durbin sent JPMorgan Chase CEO Jamie Dimon an open letter defending the provision.
April 13 -
Rep. Barney Frank said he was optimistic the Senate would soon act on a Sen. Jon Tester bill that would delay for two years a rule that would restrict interchange fees on debit cards.
April 7 -
Fed Chairman Ben Bernanke said the central bank required more time to review the more than 11,000 comment letters it has received on its interchange proposal issued in December.
March 29 -
The banking industry saw the first tangible signs of progress Tuesday in its fight to overturn the Durbin amendment, as lawmakers officially introduced bills that would delay ...
March 15 -
In a rare show of unity, the leading bank and credit union industry groups filed a joint friend-of-the-court brief to support TCF's lawsuit looking to block implementation of the Durbin amendment.
March 11 -
Several bankers spoke directly with top Fed officials on Thursday, arguing that if they finalized their interchange rule, it would gut industry profits and hurt consumers.
March 10
WASHINGTON — Sen. Jon Tester, D-Mont., took to the Senate floor Thursday to lobby for support of his bill to delay the Durbin interchange rule by two years, arguing it would hurt small businesses and community banks.
"No one has explained to me why studying the impact of this rule is a bad idea … We need to stop; we need to study; we need to make sure we're doing the right thing," Tester said. "Therefore, I ask my colleagues for their bipartisan support on a responsible bipartisan bill to delay this rule so we can have time to study the consequences of this rule both intended and unintended. Our economy cannot afford to let this rule go into affect."
Under the Dodd-Frank Act, the Federal Reserve Board was required to write a rule ensuring that interchange fees for debit cards are "reasonable and proportional."
But the industry has vigorously protested the proposal released in December, which would cap interchange rates at 12 cents. Community banks argue — and top regulators agree — that the proposal could also hurt small banks despite an ostensible exemption in the law for institutions with less than $10 billion of assets.
Without a delay, however, the Fed must finalize the rule before it goes into effect in July. Tester is hoping to attach his bill to a broader piece of legislation soon after Congress returns from its Easter recess.
"Smaller banks don't have the means to make up revenue from this federal mandate and they don't have the volume to make up this revenue elsewhere like bigger banks do," he said. "My concern is this proposed rule will further harm the loss of market share by community banks. It will lead to further consolidation in the banking industry. Community banks and credit unions simply cannot compete against Wall Street unless they provide products like debit cards."
Banks also have threatened to end some perks associated with debit cards — such as free checking — if the Durbin rule goes into affect.
"Make no mistake about it — the price caps called for by this Durbin amendment will lead to fewer debit cards offered by community banks and credit unions," Tester said. "It will limit the size of debit card transactions and it will end free checking for small businesses as they rely on these institutions. These changes will limit the ability of small businesses to conduct daily business. They will increase banking costs and could limit lending capability of small institutions."
