Deal Reached on Credit/Debit Card Swipe Fee Limits
WASHINGTON, D.C. -- States that use debit cards to distribute government benefits would be exempt from new limits on debit "swipe fees" as part of an agreement reached by key negotiators of the financial regulatory reform bill, Sen. Dick Durbin, D-Ill., announced yesterday.
"We've exempted states from interchange regulations and have included protections to ensure those who can least afford it are protected from unnecessary fees," said Durbin of the compromise that makes minor changes in a measure the senator authored to limit "interchange" fees that banks charge merchants every time consumers use a debit card.
The agreement exempts federal, state and local government prepaid cards from interchange regulation. Forty-six states and the District of Columbia distribute benefits using prepaid debit card programs, according to Gannett.
Negotiators of the financial reform bill are expected to approve the new language as part of the final bill, according to Durbin's office. The House and Senate must pass the final legislation before it becomes law.
NACS "strongly supports" the compromise, said Lyle Beckwith, a NACS spokesman, as does the Merchants Payments Coalition, another major retail trade group that has supported swipe fee reform.
Durbin's amendment passed the Senate on May 13, on a 64-33 vote. The Durbin amendment would direct the Federal Reserve to make sure swipe fees for debit cards are "reasonable and proportional" to processing fees and would prevent credit card companies from penalizing merchants for offering discounts to customers for using alternative forms of payment. It would also allow merchants to decline credit cards for purchases of $10 or less and exempts banks and credit unions with assets under $10 billion from the limit on debit card swipe fees.
Related News:
Speedway to Deliver 1.7M Signatures Supporting Swipe Fee Reform
NRF Ads Ask Congress to Keep Swipe Fee Amendment in Financial Reform
"We've exempted states from interchange regulations and have included protections to ensure those who can least afford it are protected from unnecessary fees," said Durbin of the compromise that makes minor changes in a measure the senator authored to limit "interchange" fees that banks charge merchants every time consumers use a debit card.
The agreement exempts federal, state and local government prepaid cards from interchange regulation. Forty-six states and the District of Columbia distribute benefits using prepaid debit card programs, according to Gannett.
Negotiators of the financial reform bill are expected to approve the new language as part of the final bill, according to Durbin's office. The House and Senate must pass the final legislation before it becomes law.
NACS "strongly supports" the compromise, said Lyle Beckwith, a NACS spokesman, as does the Merchants Payments Coalition, another major retail trade group that has supported swipe fee reform.
Durbin's amendment passed the Senate on May 13, on a 64-33 vote. The Durbin amendment would direct the Federal Reserve to make sure swipe fees for debit cards are "reasonable and proportional" to processing fees and would prevent credit card companies from penalizing merchants for offering discounts to customers for using alternative forms of payment. It would also allow merchants to decline credit cards for purchases of $10 or less and exempts banks and credit unions with assets under $10 billion from the limit on debit card swipe fees.
Related News:
Speedway to Deliver 1.7M Signatures Supporting Swipe Fee Reform
NRF Ads Ask Congress to Keep Swipe Fee Amendment in Financial Reform