As reported by Zack Carter of the Huffington Post:
WASHINGTON — On Tuesday, a group of nine senators led by Montana Democrat Jon Tester put their names behind legislation to delay the Federal Reserve’s upcoming crackdown on the “swipe fees” that banks charge merchants for processing debit card transactions — a huge moneymaker for the banking industry whose continuation is at the top of the industry’s lobbying wishlist.
Retailers complain that the costs of high swipe fees, also known as “interchange” fees, hurt their business and are ultimately passed along to consumers in the form of higher prices. A provision in last year’s financial-regulatory overhaul requires the Fed to limit such fees, and in December, the central bank proposed a rule that would cap the levies at 12 cents per transaction, a nearly 73 percent drop from the current average of 44 cents per transaction.
Merchants and financial reform advocates celebrated the move, but the banks are obviously loath to give up such a big piece of any revenue stream, let alone the swipe fees that industry analysts at The Nilson Report estimate yield $1.35 billion every month, or $16.2 billion per year. (Half of that total, according to Nilson, goes to just 10 banks.)
Tester’s bill, the Debit Interchange Fee Study Act, would postpone the regulation for two years’ worth of further evaluation — and chances for the bank lobby to erase it entirely….And while Tester and Corker were issuing their statements, the American Bankers Association was holding a meeting on lobbying at the D.C. Marriott Renaissance Hotel in Chinatown. At the meeting, which HuffPost attended, the banking group’s COO, Michael Hunter, coached a packed ballroom of community bankers on ways to convince key lawmakers and staffers to support the bill. The Senate bill and its House companion, Hunter said, were the ABA’s top legislative priorities for the coming year.