WASHINGTON - Today at 2:00 pm Eastern, the Senate is scheduled to vote on an amendment by Senator Jon Tester (D-MT) that is being positioned as a "compromise" measure when in fact it is the exact opposite.
This is our final push €" stop your senators from voting on this bogus legislation by acting now. Call your senators and urge them to vote "No" on Tester€™s amendment. Also, go to swipefeesletter.com and send a letter to your senators asking for a "No" vote on the amendment. Hold your senators accountable to this important industry initiative and let them know that this is a "key vote" for NACS members.
The Tester amendment is neither a compromise nor a study €" and it is not a six-month delay that its supporters are touting. The amendment is damaging €" it unravels our efforts to implement much-needed debit card swipe fee reforms because it will:
- Stop and repeal the current rulemaking, and
- Potentially all a wide range of non-debit card related costs incurred by banks, Visa and MasterCard to be recovered through interchange.
Implementation of the final rule on debit card swipe fees, as required in the Durbin amendment, is scheduled for July 21 and the final rule should be released any day. It€™s premature for Congress to revisit this issue without knowing what changes were made during the regulatory process. The Tester amendment, meanwhile, calls for a suspension and repeal of the Federal Reserve€™s rule on swipe fees. During the "study" time period provided for in Tester€™s amendment, U.S. consumers and businesses will lose $1 billion per month (over $12 billion total) and 95,000 new jobs. This will be a direct giveaway to 100 mega-banks at the expense of everyone else.
The Tester amendment is not a not a compromise €" it€™s merely another attempt by the big banks to undo swipe fee reform and ensure their excess profits are maintained.
The Federal Reserve found that although a debit transaction costs only 4 cents to process, merchants are charged on average 44 cents every time a customer swipes a debit card. The Federal Reserve proposed capping interchange fees at 12 cents, a remarkable 200 percent profit on every transaction. These numbers are likely to change in whatever final rule the Fed issues, underscoring why Congress should withhold judgment until final rules are issued.
Under the Durbin amendment the Federal Reserve is directed to exempt small banks, credit unions and thrifts under $10 billion in assets €" which is 99 percent of all banks. Tester€™s amendment, however, ignores how swipe fees hurt convenience and fuel retailers and most merchants. Card fees are the second highest operating cost for most merchants €" only labor is higher.
The U.S. has the highest swipe fees in the world and the system needs reform. Seven of the eight countries in the world with the highest per capita debit card usage have no swipe fees at all. In addition, in Europe Visa and MasterCard voluntarily agreed to lower debit swipe fee rates than the Federal Reserve proposed for the United States.
Watch the debate and vote live on CSPAN. We need 40 votes to defeat the Tester/Corker amendment.