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U.S. Senate Rejects Amendment to Delay Debit Swipe Fee Rule
Wednesday, June 8, 2011 June 8 (Bloomberg) -- The U.S. Senate rejected a plan backed by large banks for a six-month delay in a Federal Reserve rule to cap the debit-card swipe fees set by Visa Inc. and MasterCard Inc. Senators led by Richard Durbin, the Illinois Democrat who pushed to include the fee caps in the Dodd-Frank Act, turned back the proposed delay today in a 54-45 vote that left the amendment six short of the 60 needed for approval. "We should let the Federal Reserve issue this rule," Durbin said before the vote. "If more needs to be done, I'm on board, but the notion that we can't even trust the Federal Reserve to come up for a rule on this is just plain unfair." Visa Inc. and MasterCard Inc., the world's biggest payment networks, dropped the most since Dec. 16 after the vote. Visa fell 3.6 percent to $76.96 at 3:34 p.m. in New York Stock Exchange composite trading, after falling as low as $74.37. MasterCard declined 1.5 percent to $270.25 after reaching a low of $258.34. Shares of U.S. banks also slipped. The Fed now has untilJuly 21to implement the final rule on capping the fees, whichaccounted for more than $16 billion in 2009, according to the Fed. In December, the central bank proposed capping the swipe fees, or interchange, at 12 cents a transaction, replacing a formula that averages 1.14 percent of the purchase price. Visa and MasterCard set interchange fees and pass the money to card-issuing banks.The caps would reduce revenue by about $12 billion a year at the biggest U.S. lenders,including Bank of America Corp., Wells Fargo&Co.; and JPMorgan Chase&Co. The nation's biggest banks engaged in a lobbying fight over the fees with companies including Wal-Mart Stores Inc., the world's biggest retailer, and smaller rival Target Corp. At the same time, community banks and credit unions faced off against small businesses and retailers. "These bipartisan reforms will bring meaningful relief to millions of merchants and consumers," SandyKennedy, president of the Retail Industry Leaders Association, said in a statement after the vote. "With this distraction now behind us, retailers await the Federal Reserve's final rules so they can begin implementing these reforms and saving consumers money." For the complete article go to: (http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/06/08/bloomberg1376-LMH42Y1A1I4I01-4NM39ADINIGJ0L5FOO2R76IOTG.DTL) ** Find out how this should reduce your cost for debit/checkcard fees. Call or email me at: Keith Hale Relationship Manager Heartland Payment Systems (925) 518-4826 keith.hale@e-hps.com ...read more
By Heartland Payment Systems June 22, 2011