Big banks can't seem to catch a break. On Wednesday afternoon, they lost a vote that would have delayed the implementation of the rule capping so-called "swipe" fees.
The following post comes from partner site LowCards.com
On Wednesday afternoon, the Senate struck a blow against big banks by failing to pass a measure that would have postponed the implementation of reduced debit card interchange fees.
The legislation would have required a delay to study the unintended consequences of capping the swipe fee. The cap is a new regulation under the Durbin Amendment.
Sixty votes were needed and only 54 senators voted for the delay.
This is good news for retailers who have the most to gain from a lower interchange, or swipe, fee. The Fed has proposed capping the fee at a maximum of 12 cents per swipe. Banks currently charge 1-2 percent, or an average of 44 cents per debit card transaction. Banks have lobbied hard to keep this fee since a smaller interchange fee would be a devastating revenue loss for banks.
The Federal Reserve board is now working on final debit card interchange rules, which are expected to be released by the end of the month. The new fees are scheduled to take effect on July 21.
“This is a big loss for the banks,” says Bill Hardekopf, CEO of LowCards.com. “This cap on interchange fees will significantly cut banks’ revenue. Traditionally, when these revenue cuts occur, banks find new fees and charges to levy on the consumer to make up for the loss in revenue. Since it is unlikely that retailers will pass on the savings to consumers, this regulation could hurt consumers. The only real winners appear to be the retailers.”