Eliza Carney: The Expensive Swipe Fee Wars

[flpoljunkie]

The Expensive Swipe Fee Wars
Dodd-Frank ignites a pitched lobbying battle between banks and merchants.

by Eliza Newlin Carney
Monday, March 28, 2011

The Dodd-Frank financial reforms enacted last year have unleashed lobbying battles on several fronts, but none has been so pitched or costly as the fight over debit card swipe fees.

“It is one of the most active lobbying efforts I have ever seen,” said Senate Majority Whip Dick Durbin, D-Ill., in one of several floor statements assailing a full-court press by banks and credit card companies to repeal a last-minute amendment he inserted into the Wall Street Reform and Consumer Protection Act. (The act is known as the Dodd-Frank law for its lead authors, Rep. Barney Frank, D-Mass., and former Sen. Christopher Dodd, D-Conn.)

Durbin’s amendment caps the debit card fees that banks may charge merchants, requiring such charges to be “reasonable and proportional” to underlying costs. Retailers had long sought limits on these so-called interchange fees, which represent billions in revenue for banks. In the wake of the fiscal crisis, when big banks were in a defensive crouch, Congress embraced the swipe fees cap as a consumer-friendly fix.

But now the banking and card industries, emboldened by their new allies in the GOP-controlled House, and by suggestions that limiting fees could hurt smaller financial institutions, are fighting back hard.

They recently won a small victory on Capitol Hill when a bipartisan group of senators, led by Democrat Jon Tester of Montana, introduced a bill to study the impact of the swipe fee regulation and delay its implementation for two years. A similar bipartisan House bill, authored by Reps. Shelley Moore Capito, R-W.Va., and Debbie Wasserman Schultz, D-Fla., also calls for more study and a one-year delay.

more...

[fasttense]

1. Now the giant corporate aristocracy is fighting among itself for

the scraps.

Soon, the average American will have to decide which corporate entity they will worship, I mean support. Each corporation can own a part of the country just like tribal warlords. Then they will be sending their employees out to battle for resources. All bow to your new corporate lords.