Copyright: | (c) 2011 The New York Times Company |
Source: | New York Times Digital |
Wordcount: | 1047 |
The debit-card rules were a major part of the Dodd-Frank financial regulation bill passed last year and the
Although 54 senators voted in favor of the delay, the measure, which was sponsored by Senator
Even with the defeat, the vote represented a remarkable come-from-behind lobbying campaign by banks to recover from the drubbing they took during the anti-
The Wednesday vote, which followed a vigorous floor debate, was a victory for retailers, who have complained that banks and the companies that control the largest debit-card networks, Visa and
Those fees topped
The Federal Reserve, as guided by the new law, had proposed rules that would cut the average debit-card processing fee to between
The new regulations are scheduled to take effect by
The vote also provided a victory for Senator Durbin.
By coming close to victory, banks are likely to be emboldened to fight other regulations being drawn up as a result of the Dodd-Frank bill. Those include rules that would subject derivatives to increased margin requirements and force derivative trades through a central exchange. Bankers and business lobbies are also opposed to the structure of the new
“This shows the banking industry has mounted a very effective fight,”
Both sides sought to portray the fight as big well-financed monoliths against small-town retailers and banks. Bank lobbyists said that the rule would most harm small community banks and credit unions, while benefitting giant retailers like
Similarly, a coalition of retailers framed the debate as the giant banks that issue the most debit cards – J.P. Morgan Chase,
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There were elements of truth to both arguments.
Banks, in a flurry of ads in subway cars and on television, portrayed the debit-fee reduction as a
Similarly, independent business owners testified before
The Federal Reserve already missed an April deadline to finalize the debit-card rules, and lobbyists on both sides of the issue said that Fed officials expressed a desire for
Though the major card companies said they would work to implement a system that allowed for two tiers of charges – one for big banks subject to the limits and another for smaller banks that were exempt – the top banking regulators at the Fed and the
Among the heavy hitters who worked to influence votes on the debit card fight were former House Majority Leader
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