The National Retail Federation launched a radio ad campaign aimed at Senator Jon Tester’s attempt to stall swipe-fee reform.
As debate heats up on Capitol Hill, the ads urge Tester (D-MT) to rethink his opposition to swipe fee reform. The NRF says swipe fee reform would save retailers and consumers more than $1 billion in interchange fees banks charge to process debit card transactions.
The Montana Retail Association is also taking part in the radio ad campaign, which will be run on radio stations in Tester’s home state.
Tester introduced legislation in March that would delay implementation of swipe fee reform by two years and require a new government study of the issue. Tester said last week he would modify the bill to seek a 15-month delay to include a six-month study, six months for the Federal Reserve to draft new regulations replacing those proposed in December, and three months to prepare for implementation.
Tester’s legislation aims to block swipe fee reform passed by Congress last year, and is scheduled to go into effect on July 21. A provision in the 2010 Wall Street reform bill will reduce the fees by an estimated 70%, saving about $14 billion a year that retailers could pass along to their customers through discounts or other benefits. But the banking industry is spending millions of dollars to delay the reform, according to NRF.
If it passes, Tester’s Debit Interchange Fee Study Act would delay the Dick Durbin (D-IL) Amendment to the Dodd–Frank Wall Street Reform and Consumer Protection Act. This amendment would cap the interchange fee that a merchant’s bank pays a customer’s bank when merchants accept debit cards at 12 cents per transaction.
Meanwhile, the Electronics Payment Coalition issued a release today that challenges the Durbin Amendment, stating that swipe fee reform would eliminate fraud protection funding for banks and credit unions.
The group said banks and credit unions in 2009 spent about $1.4 billion in fraud losses related to debit card transactions in order to ensure the safety of consumers and retailers, and that swipe fees covered most of that cost.
In its statement, the EPC cited a letter crafts merchant Michaels sent to customers earlier this month that warned of a security breach involving PIN numbers and advised its customers to work with their banks for advice on protecting their accounts. Michaels’ corporate offices are in Durbin’s home state of Illinois.