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National Restaurant Association - Big banks lose -- again -- in bid to undo swipe-fee caps

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Big banks lose -- again -- in bid to undo swipe-fee caps

Debit-card companies and their allies continue to hammer away at a new federal law that will limit swipe fees for merchants when guests pay by debit card.

But the card companies and their allies are getting defeated at multiple turns.

Big banks and card companies tried hard this spring to get Congress to kill the part of last summer's financial-services reform law that caps debit-card interchange fees for merchants. They failed

This week, the banks and card companies took their complaints to San Antonio, Texas, where more than 1,000 state lawmakers were meeting as part of the National Conference for State Legislatures' legislative conference.

Banking interests tried to get state legislators to support a resolution calling on Congress to repeal the 2010 Dodd-Frank financial-services reform law. The Dodd-Frank law contains a hard-fought, NRA-supported amendment -- known as the Durbin Amendment, after Senate sponsor Dick Durbin (D-Ill.) -- that will shortly produce the nation's first cap on debit-card swipe fees for merchants. Bankers at the NCSL event used the merchant debit-fee changes as an example of why the Dodd-Frank law is a problem and should be repealed.

To the bankers' dismay, restaurateurs and other Main Street merchants made their voices heard. Legislators at the NCSL event blocked the banks in their effort to pass the resolution. Even after banks and card companies saw state lawmakers' support for debit-fee caps and offered to remove the debit-fee language from their proposal, the committee bypassed the offer -- and voted to reject the resolution completely.

"This was a solid victory for merchants and their customers," said Scott DeFife, the NRA's executive vice president of policy and government affairs. "The NRA and its members were present in force at the NCSL meeting, and numerous restaurateurs contacted their state lawmakers urging them to keep the swipe-fee reforms on track. "

The recent string of defeats probably won't keep the banks and card companies from trying to undo the swipe-fee reforms, DeFife said. But he said merchants will continue to fight back. "We will continue our vigilance to ensure that we protect the progress we have made."

The Federal Reserve in June issued a rule that generally caps debit-card fees at 21 cents per transaction, down from the average 44 cents per transaction that merchants pay for debit-card transactions today. The new cap takes effect Oct. 1.

 

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