Debit Interchange Finds Vehicle Leading Up to Possible Wednesday Vote (Misc News: June 6, 2011)
Sen. Jon Tester has apparently found a vehicle for his amendment to delay the debit interchange provision. That might indicate that he also has the votes to pass it.
CUNA – @NewsNowLiveWire – tweeted Monday morning that Tester’s debit interchange amendment could be attached to legislation to reauthorize the Economic Development Administration. Tester had sought a bill for a noncontroversial issue to attach his amendment.
CUNA also said that the vote could come Wednesday, news that was reported last week by several outlets. Although he plans to vote against the bill, Senate Majority Leader Harry Reid has promised to let the measure come to a vote before the full Senate.
On Friday, the MCUL announced that Sen. Debbie Stabenow had joined with supporters of the delay. Michigan’s senior senator, Democrat Carl Levin, has not announced which way he would vote on the measure.
Tester needs at least 60 votes to avoid the filibuster promised by powerful Sen. Dick Durbin, who sponsored the last-minute interchange amendment to the landmark
Dodd-Frank Wall Street Reform and Consumer Protection Act passed last summer. Various reports have put the number of supporters in the high 50s or low 60s, with several senators remaining noncommittal on the issue. Some were hoping the Federal Reserve would come through with a fix to the rules it proposed that would implement the Durbin Amendment.
On Friday, two credit union CEOs met with Fed General Counsel Scott Alvarez to discuss how the rules would affect credit unions if implemented as currently written, according to CUNA News Now.
Jane Watkins, CEO of Richmond, Va.-based Virginia CU, and Tom Dorety, president/CEO of Suncoast Schools FCU in Tampa, explained to Alvarez how the loss of interchange income that would result from the Fed's proposed fee cap would impact their credit unions, their members and their communities.
"We described who our members are – what they are like. For instance most (Virginia CU) members are dual wage-earning families with a combined income of about $50,000 a year, max," Wakins said. She said imposing a fee on these members to make up the lost interchange income, as some credit unions may have to do, would pack a wallop. Click here to read CUNA’s story on the CU representatives’ visit.
The Fed rules cap interchange fees at a maximum of 12 cents per transaction. Currently, financial institutions charge 1 to 2 percent per transaction, with the average fee being about 44 cents. The amendment includes a “carve out” for issuers with less than $10 billion in assets, but most credit union and small bank observers, as well as most regulators, don’t believe the exemption will work in the marketplace. Fed Chairman Ben Bernanke is among those who do not believe the exemption will work.
The Fed has been struggling to come up with a revised version of its rule implementing interchange. The agency has been bombarded with complicated communications, mostly from credit unions. In mid-April, Bernanke said that the Fed board would miss the April 21 deadline for publishing its final rule. The law is scheduled to take effect on July 21, but the Fed still hasn’t issued its final rule to implement it.