'Swipe' fee battle in round two as banks, retailers square Off
Go Deeper.
Create an account or log in to save stories.
Like this?
Thanks for liking this story! We have added it to a list of your favorite stories.
(Bloomberg) -- Financial services lobbyists are counting on the Republican majority in the U.S. House to help them reopen the battle they lost to retailers over a proposed Federal Reserve rule that would cap debit-card "swipe" fees.
Wayzata-based TCF Financial has sued the Federal Reserve in an effort to overturn the cap.
The House Financial Services Committee will give both sides a Capitol Hill forum today to address the Fed proposal, which would limit the so-called interchange fees charged to merchants at 12 cents per transaction. The hearing will provide the first glimpse of changes lawmakers may pursue.
"The idea that Chairman Ben Bernanke and the Fed would set prices in any industry is abhorrent to Republicans," said Sam Geduldig, a former House Republican leadership aide who now is a financial services lobbyist for Clark, Lytle & Geduldig. "Because of that sentiment, we've gained a lot of traction on this issue with the new Republican majority and have a lot of momentum as we continue to push for legislative changes."
The dispute is a result of last year's Dodd-Frank regulatory overhaul, which contains a provision introduced by Senator Richard J. Durbin, an Illinois Democrat, instructing the Fed to cap the fees.
Large banks stand to lose more than $12 billion in revenue if the proposal as written by the Fed becomes final. Shares of Visa Inc. and MasterCard Inc., which set the fees and pass the money to card-issuing banks, tumbled more than 10 percent after the proposed rules were made public on Dec. 16, amid investor concern that the caps will damage their business model.
"Whether you're talking about government price fixing, which is anathema in this country, or you're talking about harm to consumers, there are enough problems with this that I would think both sides of the aisle would pause and want to reflect and consider," Joshua R. Floum, Visa's general counsel, said in an interview Wednesday.
Turn Up Your Support
MPR News helps you turn down the noise and build shared understanding. Turn up your support for this public resource and keep trusted journalism accessible to all.
Dear reader,
Your voice matters. And we want to hear it.
Will you help shape the future of Minnesota Public Radio by taking our short Listener Survey?
It only takes a few minutes, and your input helps us serve you better—whether it’s news, culture, or the conversations that matter most to Minnesotans.