Banks, Retailers Renew Fight Over Debit ‘Swipe’ Fees

by Mercator Advisory Group 0

Wide range of gift card ideas for all types of people
At yesterday’s hearing by the House Financial Services Committee over the Durbin Amendment, the fur didn’t exactly fly, but tensions were evident on all sides as both the Federal Reserve and an industry panel were grilled by committee representatives for over four hours. An implementation delay hangs in the balance, representing billions of dollars in income for financial institutions and reclaimed capital for merchants. These are high stakes games indeed.

Fed officials today left the door open to revising the proposal. Fed Governor Sarah Bloom Raskin, in testimony prepared for the House hearing, said the rule “may result in significant market changes.” Citing the “novelty and unusual complexity” of the rulemaking, she said the central bank would “reserve judgment” on the final language until all the public comments were received.

One of the issues that appears to be getting some widespread support, is how best to protect the small financial institutions from the unintended consequences of interchange fee regulation. Even Chairman Bernanke took up the cause in his separate testimony yesterday.

At a separate hearing before the Senate Banking Committee, Fed Chairman Ben S. Bernanke said that the bank’s governors are uncertain that smaller lenders would be helped by an exemption in the rule for those with less than $10 billion in assets. Echoing the public comments of some of those lenders, Bernanke said “it is possible that the exemption will not be effective in the marketplace.”

And now we wait – April 21st is coming at us fast, and the Federal Reserve was clear that they are not halting their rules writing process without a mandate from Congress.

Read the entire article here:

Featured Content