Lawmakers Won't Repeal Debit Swipe-Fee Reform
WASHINGTON, D.C. — The retail community is breathing a collective sigh of relief as news spreads that the federal legislators have decided to keep debit swipe-fee reform in place.
According to a report by Politico, leaders in the U.S. House of Representatives will remove language eliminating the cap on debit card swipe fees from the Financial CHOICE Act, a Republican-led bill to revamp financial reform that would repeal the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Lawmakers made the move to strike the repeal of the cap after confirming on May 24 that the proposal could put support for the overall legislation in jeopardy, the news outlet said.
House Financial Services Committee Chairman Jeb Hensarling (R-Texas) plans to offer a manager's amendment to remove the provision from the bill, which he wrote, committee spokesman Jeff Emerson said.
Hensarling is the driving force behind the Financial CHOICE Act.
Several retail groups — which won a hard-fought lobbying fight with the financial industry for the swipe-fee cap — welcomed the news.
"We look forward to seeing the official language in the manager's amendment, and encourage members to continue to voice support for the debit reforms to your representatives until it is officially removed," said NACS, the Association for Convenience & Fuel Retailing.
The Retail Industry Leaders Association (RILA) had also opposed efforts to repeal swipe-fee reform that was set in the Durbin Amendment to Dodd-Frank.
"Preservation of swipe fee reform is an important victory for retailers and consumers who would have faced higher fees from the country's largest banks with every swipe of a debit card," said Austen Jensen, vice president of Government Affairs and Financial Services for RILA.
With the fate of the cap settled, RILA looks forward to supporting key provisions in the CHOICE Act as this legislation moves forward in the House of Representatives, according to Jensen.
The National Retail Federation (NRF) added the organization will continue to follow the bill to ensure swipe-fee reform is not included in the final legislation.
"This is a major victory for the consumers who have saved billions of dollars under swipe fee reform and for the communities where retailers have used swipe savings to improve customer service, create jobs and boost the local economy," NRF Senior Vice President and General Counsel Mallory Duncan said.
"Repeal of reform would have allowed banks to return to the uncompetitive market that allowed them to set these fees as high as they liked. The progress that was made toward competition would have been lost, and consumers would have seen nothing but higher prices," she added.
In addition, the Food Marketing Institute (FMI) commended the move.
"We are grateful to the many members of Congress who listened intently to their constituents about an incredibly complicated subject — routing and competition in debit card transactions — and understood that competition is critical, that the reforms are working and that they should be maintained." said Leslie G. Sarasin, FMI president and CEO.