SAN ANTONIO - The banks are at it again, seeking to kill the Durbin amendment, and were again unsuccessful.
At this weekï¿½ï¿½s National Conference of State Legislaturesï¿½ï¿½ (NCSL) Legislative Summit thousands of state legislators exchanged ideas on the most pressing issues facing state legislatures.
Among them, members of the Communications, Financial Services and Interstate Commerce Committee considered a resolution to repeal the Dodd-Frank Wall Street Reform and Consumer Protection Act, which includes the Durbin swipe fees reform amendment. The resolution, brought up by Texas state Rep. Dan Flynn, included this proposal:
Another example of federal intervention in the pricing of financial products is the rate caps placed on interchange fees for debit cards; the Dodd-Frank Act takes the pricing of these services from the marketplace and places it in the hands of the Federal Reserve; the most recent proposal from the Federal Reserve would so severely restrict interchange fees that banks and credit unions will be unable to cover the full costs associated with providing checking accounts and debit cards; as a result, banks and credit unions will be forced to cease offering some debit and checking products and to increase fees on those they continue to provide; lower income citizens who have obtained greater access to affordable retail banking, partly because of interchange fees, will have less access to traditional institutions and be forced to go back to the less regulated "shadow" banking system with its increased costsï¿½ï¿½National Conference of State Legislatures hereby respectfully urge the Congress of the United States to repeal the Dodd-Frank Wall Street Reform and Consumer Protection Act; and, be it further resolved, that a copy of this resolution be sent to all members of the 112th Congress and the President of the United States.
Significant grassroots pressure from the retail community at the state level, including state convenience and fuel retailing associations and members of the Merchants Payments Coalition, forced Rep. Flynn to reluctantly make a motion to strike all language that referenced swipe fees, which was then accepted by the committee. The revised resolution failed to pass the committee.
"I believe there was a lot of work done throughout the entire industry, and when we see these results it encourages us to continue to be engaged," Jim Tudor, president of the Georgia Association of Convenience Stores, told NACS Daily. "This issue is indicative of the potential retailers have when we mobilize, and our grassroots strength is one of the best weapons we have in our arsenal. Weï¿½ï¿½re everywhere, and there are very few elected officials who canï¿½ï¿½t be reached when we have the commitment to do so."
Despite their recent string of defeats, the banking industry will likely continue to chip away at the new financial services reform law at every level of government. NACS will continue to ensure that progress made on this issue is protected.