WASHINGTON -- The massive Restoring American Financial Stability Act of 2010, championed by President Obama, has been approved by House and Senate conferees.
In advance of the vote, House and Senate lawmakers reached a compromise regarding the rules that would govern federal regulation of debit card fees. The Interchange Amendment (3989) to the measure was proposed by Sen. Dick Durbin, (D-IL). It gives oversight responsibility for debit card interchange fees to the Federal Reserve Board, and incorporates recommendations that Sen. Durbin has made to regulate the fees charged by banks for debit card transactions (see story).
The House-Senate conference made minor changes to the Amendment, primarily to make the language more explicit.
The modified provision leaves "reloadable" or prepaid debit cards largely unregulated, and exempts "small" issuers of cards (issuers with less than $10 billion in assets) from its provisions. It also largely exempts cards issued by government agencies for payment programs to administer (e.g., unemployment insurance, Temporary Assistance for Needy Families and child support).
The amendment clarifies that the "Federal Reserve Board now has the authority to prescribe regulations regarding interchange transaction fees charged or received with respect to an electronic debit transaction. It also authorizes the Board to issue regulations to implement the subsection of the bill, and to prevent "circumvention or evasion" of the subsection.
"This agreement is a major victory for small business owners and consumers fed up with big bank and credit card industry rip-offs," said Rep. Peter Welch (D-VT). "It preserves key protections for the grocers, retailers and country store owners most affected by out-of-control swipe fees, while addressing legitimate concerns of the industry. I am confident this agreement will be approved by the full committee because every conferee represents small business owners who are tired of serving as a piggy bank for Visa and MasterCard."
Advocates of the amendment pointed out that the cost to merchants of using credit cards has more than doubled since 2003. According to figures provided by Sen. Durbin's office, nearly $50 billion in interchange fees was collected last year, with about 80% of that money going to the 10 largest banks in the U.S.
The full 2,000-page bill now returns to the House and Senate for final approval.