The U.S. Senate rejected on Wednesday a measure to delay a cap on what banks can charge merchants when a debit card is used.

The vote was a major defeat for the banking industry, which stands to lose billions of dollars when the cap goes into effect later this year.

Here's the story:

http://www.msnbc.msn.com/id/43329885/ns/business-retail/

So, will we get a final rule before it goes into effect on July 21? I'll bet there are some busy people at the Fed working on Reg II.

I don't think I can say it any better than this..
It's amazing how these *$!(@#* have no problems voting for rules on which they have no idea of the impact.

My pet peeve is it does not limit what banks can charge merchants. It limits the interchange issuers can collect from acquirers, what the acquirers charge the merchants isn't limited by Durbin. ::end of rant::

There are some really dumb senators out there if they can't do such simple math. Wanna bet they scream the loudest when the free checking and rewards programs all go away? We'll be the bad bankers depriving customers of their "rights".

And of course, both of the flaming liberal clueless senators from NJ voted against the delay. Even Gillibrand and Schumer of NY voted for the delay!

The defeat really stinks, but let's remember we DID have some senators vote "yes". I think it is very important for us to remain in contact with our senators, so that they know exactly where we stand. That means it is just as important to thank them for voting on issues that we favor, especially if the bill was defeated.

The ABA has a link (Grassroots Advocacy) where you can enter your zip code, and it would provide the name and email address of your representatives.

This battle isn't quite over. TCF Financial still has a court hearing in St. Louis in front of a 3 judge panel, June 16th I believe. The judge in S. Dakota refrained from granting them an injunction in April, stating that "he wanted to see the legislative process play out" - well now it has. Their case is sound, but as we all know that doesn't always win.

WD

WD - Do you have a link on that story? I would love to read up on it!! Thanks in advance!!

I saw a comment by Durbin stating that there is no interchange fee in Canada. So, I started to look for info on how the process works in Canada - apparently cardholders often pay per card transaction fees. I know I don't.

http://www.parl.gc.ca/Content/LOP/researchpublications/prb0909-e.htm

From ABA:

Senate Fails to Defend Community Banks; Critical Interchange Amendment Defeated
The Senate today failed to approve an ABA-backed amendment that would have stopped, studied and fixed the Federal Reserve’s harmful debit interchange rule. The amendment required 60 votes to pass but fell short in a 54-45 vote.

Months of aggressive grassroots lobbying by ABA and state association bankers resulted in more than 250,000 letters from bankers to members of Congress and countless phone calls and meetings in recent months. But ultimately these extraordinary grassroots efforts could not overcome a massive misinformation campaign by big-box retailers and efforts by Senate Majority Whip Richard Durbin (D-Ill.) to preserve the price-control rule, which promises to deliver a $14 billion windfall to retailers.

The amendment to the Economic Development Revitalization Act of 2011 -- offered by Sens. Jon Tester (D-Mont.) and Bob Corker (R-Tenn.), along with Sens. Kay Hagan (D-N.C.), Michael Crapo (R-Idaho), Michael Bennet (D-Colo.), Roy Blunt (R-Mo.), Tom Carper (D-Del.), Jon Kyl (R-Ariz.) and Chris Coons (D-Del.) -- was a modified version of the ABA-backed S. 575. Changes had been made in a bid to attract the votes needed to ensure the legislation’s passage.

While the changes and bankers’ grassroots lobbying helped persuade a majority of senators to vote for the amendment, the 60-vote “supermajority” needed to clear the measure proved to be an impossible hurdle to overcome.

“The Senate has essentially said that it is fair for one industry to reap what another has sown, and American consumers will now have to pay more for basic banking services, while big-box retailers go off and count their unjustified profits,” ABA President and CEO Frank Keating said in a statement on the disappointing vote. “It is simply unconscionable that the Senate would not act to protect community banks from [the rule’s] destructive effect.”

Keating said ABA would continue to push hard for relief from the “ill-conceived law,” adding that the Fed, which must soon finalize its rule, has the power to mitigate the rule’s disastrous consequences. “We urge the Fed to take all necessary action to do so,” said Keating.

Appears we got a letter from our network provider yesterday saying they are not even going to attempt to offer a two-tiered pricing system. We can either accept the lower fee or get out of the contract. Thanks Dick Durbin! That didn't take long!

Walmart and Tarjay should have record profits very soon...

Carolina Blue, can you share who your network provider is?

By the way, our operations dept sent a letter to Casey of PA about voting against the delay and he responded a delay would hurt small businesses. What does he think a community bank is anyway?

This should be shared with your Senator and Congressmen.

Agree!

Bank Urges Debit Card Fee Cap Suspension

Yup. See what happens when all powerful Washington puts us out of business and see what REALLY happens to small businesses and Main Street then.