Senate may delay debit-card swipe fee cap
A bipartisan group of U.S. senators is drafting legislation to delay debit-card “swipe” fee rules that banks say would cost them billions of dollars, Bloomberg reported.
Sens. Jon Tester of Montana and Tom Carper of Delaware, both Democrats, are working on the bill’s language with Sen. Bob Corker, a Tennessee Republican, according to two aides who requested anonymity because the talks aren’t public.
The Federal Reserve proposed capping debit-card interchange fees charged to merchants at 12 cents per transaction under a Dodd-Frank Act requirement to align them more closely with the processing costs. A bill to delay the measure, which may come this week, would be the first legislative attack on a rule that could cost lenders including Bank of America Corp. and JPMorgan Chase & Co. as much as $12 billion in annual revenue.
Opponents of the rule have found supporters in Fed Chairman Ben Bernanke and Federal Deposit Insurance Corp. Chairman Sheila Bair, who questioned a provision exempting banks and credit unions with less than $10 billion in assets, saying it may have the unintended consequence of harming smaller lenders.
Wells Fargo & Co. CEO John Stumpf yesterday blasted the proposed regulations during a speech in Minneapolis to the Economic Club of Minnesota. Stumpf said the fees, around 40 cents for an average $38 debit transaction, allow banks to cover the costs and risk of providing debit cards to customers.
Stumpf, who also serves on the board of Target Corp., said that in the long run, a cap on fees would hurt retailers like Target as well as consumers, because increased government oversight will make doing business more difficult and expensive.