Financial reform legislation appears ready for a U.S. Senate floor vote as early as next week and, thanks to an amendment from an Illinois senator, the bill now includes greater relief for U.S. businesses on the issue of swipe fees.
The Senate voted 64-33 on May 13 to pass an amendment, sponsored by Senate Majority Whip Richard Durbin (D-IL), to the Restoring American Financial Stability Act of 2010 designed to help address what the lawmaker and scores of small businesses characterize as "excessive" fees and underlying "anti-competitive" practices on the part of credit card companies. Under the proposed reform provisions, the Federal Reserve would gain authority to regulate interchange fees, or swipe fees, and ensure such fees are administered in ‚Äúreasonable‚ÄĚ proportions.
The measure still has a long way to go given the possibility of additional floor debate and behind-the-scenes negotiations on the reform package, which is being spearheaded by Senate Banking Committee Chairman Christopher Dodd (D-CT) and appears virtually certain to be voted on before month‚Äôs end.
Durbin, backed by about 134 trade associations, endorsed proposed improvements to the regulation of credit card companies, citing that interchange and or swipe fees have become a way for creditors to circumvent many of the CARD Act's intended reforms. The group of trade associations contended that more than 80% of these interchange fees have been collected by the 10 largest banks operating in the United States.
Another group in opposition of the escalating swipe fees, the Merchants Payment Coalition, applauded the Senate vote in the hours following the May 13 session, saying senators ‚Äúdid the right thing by voting in favor of merchants and consumers.‚ÄĚ
‚ÄúSwipe fees have spiraled out of control in recent years, and this amendment is necessary to rein in these excessive fees and ensure that Main Street receives a fair shake,‚ÄĚ the Merchants Payment Coalition said in a statement following the vote. ‚ÄúThese fees are harmful across the board ‚Äď from large businesses to small retailers to American consumers.‚ÄĚ
Brian Shappell, NACM staff writer