WASHINGTON — A sponsor of legislation to ease the impact of interchange rules on banks announced another revision Tuesday as lawmakers prepare for a vote later this week.
Sen. Bob Corker, R-Tenn., said the new version would allow the Federal Reserve Board — which is writing the rules to cap debit-card swipe fees — to consider a broader range of costs banks accumulate in processing payments.
"It's been crafted in a way to bring people together," Corker said in remarks on the Senate floor.
Originally, the Fed — mandated by the Dodd-Frank Act to establish fees that were "reasonable and proportional" to payment costs — could only consider those costs directly related to processing a debit payment. In December, the agency proposed a 12-cent cap on fees for debit-card transactions.
But the new legislation by Corker and Sen. Jon Tester, D-Mont., would allow the central bank to include indirect costs.
"It allows them to consider all costs, both fixed and incremental," Corker said of the language, which would be added as an amendment to a broader economic-development bill.
The Dodd-Frank provisions, Corker said, "would be like saying to a pizza company … that the only thing they can charge for is the dough. They couldn't charge for anything else that went into the cost of the product that was being sold."
The changes are being offered to lure more supporters, he said.
Initially, Tester and Corker had proposed language forcing a two-year delay and study before the Fed could complete its rules. That period was later shortened to 15 months.
As the vote nears, and it is unclear if the two senators had enough support, Corker indicated the intent was to shorten that period even further. According to language for a compromise amendment circulated early Tuesday, there would be a six-month study of the new interchange provisions, followed by six months for the Fed to rewrite its rules.
But Sen. Richard Durbin, D-Ill., who authored the original interchange provisions in Dodd-Frank, said the language offered by Corker and Tester was not sufficient.
"Some members have called it a compromise. It's not a compromise," Durbin said. "A compromise suggests both sides came together and agreed on something. There has not been any input from the retailers, small businesses and consumers across America. The only compromise is among the big banks and the bigger banks."
