“Working together across party lines, we’ve found common ground and agreed on a plan that actually fixes the problem with a balanced approach,” Tester said.
The debate centers on the fees that merchants must pay banks each time a debit card is swiped. They average is between 1 and 2 percent of each purchase and totaled $16.9 billion in 2009, according to the Fed. The proposed regulations would reduce the fees by roughly 70 percent to a maximum of 12 cents a swipe. Credit cards, which can carry significantly higher interchange rates, are not covered by the law.
Among Tester’s co-sponsors were Sens. Bob Corker (R-Tenn.) and Kay Hagan (D-N.C.), who had previously voted in favor of overhauling swipe fees. Tester needs 60 votes to prevent a filibuster, and one banking executive said Tuesday night that the industry had secured a number in the mid-50s, with 10 additional senators undecided.
But Senate Majority Whip Richard J. Durbin (D-Ill.) has vowed to fight the proposal. Durbin championed changes to debit-card swipe fees last summer as part of the broader overhaul of the nation’s financial system. The law is scheduled to take effect July 21 unless Tester’s bill passes.
Retail groups said they are positive they will have the votes to block it. “We’re confident in our vote count,” said Brian Dodge, spokesman for the Retail Industry Leaders Association (RILA). “We were confident a year ago, when we won.”
RILA polled voters in six key states — Montana, Nevada, New Hampshire, New York, North Carolina and West Virginia — and found that at least 70 percent supported changes to swipe fees. The largest support came from Tester’s home state, the group said.
Retailers say they have little power to negotiate swipe fees, which are set by card networks such as Visa and MasterCard but paid to the banks, resulting in higher consumer prices. Financial firms say the reduction in fees is forcing them to raise other charges and eliminate popular perks such as rewards programs.