The United States Congress will be voting on a brand new bill that is aimed at replacing the Dodd-Frank bill, but first it will have to undergo a few edits. One controversial provision of the bill, for example, might now be omitted: the Durbin Amendment.
The Durbin Amendment puts a cap on the transaction fees that debit card issuers can charge upon merchants.
The bill—the Financial Choice Act—will get its final cuts as it passes through the House Financial Services Committee after nearly a year of unveiling the first draft. The agency will probably look to repeal specific language within the Durbin Amendment, language which sets limits to the card swipe fee amounts—and the payment of these fees—banks can charge.
House Services Committee chairman, Rep Jeb Hensarling, R-TX, doubts the repeal will be able to go any further.
“I know that we have members on both sides of the aisle that may be a little conflicted on the issue. … We’re still listening,” he said, adding that he is “convinced that we will get the Financial Choice Act passed, regardless of the outcome of Durbin.”
Those Republicans who oppose the language of the original amendment, and now support the repeal, do so out of a disbelief the government should be allowed to set prices, though they cannot agree on exactly who should bear that cost.
Hensarling expressed, in press briefing last Thursday, that the future of this amendment is not very clear, acknowledging that the Congressional division over the amendment does not line up with party strategies.
But the issue has not only divided the political parties; industries are feeling the pinch too. Retailers and restaurants alike have also made the push to keep the amendment as it stands; obviously, changing it in any way would force them to have take on more of the transaction costs. In addition, the National Restaurant Association is also pushing to keep the amendment as it is.
Accordingly, NRA vice president of communications, Leslie Shedd, comments, “After taking billions in bailouts from taxpayers, the country’s biggest banks now want to put a debit card tax on consumers and small businesses — all to fatten their own bottom line.”