Senate Committee Weakens Swipe Fee Reforms

Tell your senator that you oppose any action that would reduce number of banks subject to debit fee reform.

July 27, 2015

WASHINGTON – Five years after Congress passed legislation to reform debit interchange fees for retailers, the Senate Appropriations Committee took steps to weaken those reforms. Last week, the Senate Appropriations Committee approved the Fiscal Year 2016 Financial Services and General Government Appropriations bill by a 16 to 14 party line vote, with Republicans voting in favor and Democrats in opposition. The legislation, which provides annual funding for the U.S. Treasury Department, Small Business Administration and several other agencies, also contains language that would amend and weaken the Durbin Amendment to the Dodd-Frank Act, which reformed debit card swipe fees.

Currently, debit reforms only apply to banks that have more than $10 billion in assets – approximately 1.5% of all banks. The appropriations bill would index this $10 billion asset threshold to the national Gross Domestic Product (GDP), ultimately reducing the number of banks subject to debit reform. This change would have a negative impact on consumers, convenience store owners and other retailers by exempting more banks from the reforms. To address this serious problem, the Merchants Payments Coalition (MPC), of which NACS is an Executive Committee member, actively pushed to remove the provision, including sending a letter to Committee members, and ultimately opposed the bill.

The modification to the Durbin Amendment was included as part of a broader Dodd-Frank reform bill approved earlier this year by the Senate Banking Committee. That bill – S. 1484, the Financial Regulatory Improvement Act of 2015 – authored by the Chairman of the Banking Committee, Senator Richard Shelby (R-AL), was attached to the appropriations bill as the Committee drafted its legislation. Earlier this year, Shelby, a senior member of the Appropriations Committee, hinted that he would use the appropriations process to reform the financial reform law, as he did last week.

Importantly, the Committee-approved appropriations bill has not yet passed the Senate nor has it been signed into law. We urge you to contact all senators on the Appropriations Committee, with a particular emphasis on the Republicans who voted in favor of the bill, to urge them to remove this harmful language as debate proceeds in the appropriations process.  The inclusion of the language in a final bill would ultimately harm consumers and retailers by weakening debit card swipe fee reform. NACS and the MPC will continue to actively oppose the bill unless and until the provision exempting more banks from the Durbin Amendment is removed.

You can send a pre-drafted letter to your senators urging them to remove this harmful language through our grassroots system here.

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