WASHINGTON, D.C. — U.S. Rep. Jeb Hensarling (R-Texas), chairman of the House Financial Services Committee, put forward a discussion draft on April 19 of his Financial CHOICE Act, which includes language to repeal debit swipe-fee reform.
The existing debit swipe-fee reform, usually referred to as the Durbin Amendment, limits the fees that Visa and MasterCard can fix on behalf of the largest banks. NACS, along with other members of the Merchants Payments Coalition, is advocating for the repeal of the provision ending the Durbin Amendment. The convenience-store association announced on April 20 that it will oppose the bill as long as the provision ending the Durbin Amendment stays in place.
NACS said the Durbin Amendment ensures routing competition by requiring there be two unaffiliated routing network options on a debit card. This prevents Visa and MasterCard from blocking competitors from being on debit cards. The elimination of the Durbin Amendment would likely mean higher swipe fees for merchants, which would in turn raise the prices consumers pay for goods and services.
This bill marks the second version of the Financial CHOICE Act that Hensarling put forward last year, which did not make it past the House. While the Durbin Amendment would be one casualty if the bill were to pass, Hensarling’s main target is the larger Dodd-Frank Act, which was enacted in 2010 to prevent another financial crisis similar to that of 2008.
“Republicans are eager to work with the president to end and replace the Dodd-Frank mistake with the Financial CHOICE Act because it holds Wall Street and Washington accountable, ends taxpayer-funded bank bailouts and unleashes America’s economic potential,” Hensarling said. The Texas congressman has set a hearing for April 26 to discuss the bill.
Republicans like Hensarling believe the regulations resulting from Dodd-Frank have stifled the economy and put an undue burden on businesses, while Democrats see Dodd-Frank as an important tool to prevent the next financial crisis. President Donald Trump has not taken an official position on the Durbin Amendment, specifically, but he has expressed interest in cutting back on Dodd-Frank.
“We’re doing a major elimination of the horrendous Dodd-Frank regulations, keeping some, obviously, but getting rid of many,” Trump said, though he has not released a formal plan.
The bill’s passage into law is uncertain, as it would need support from eight Democrats in the Senate to pass. Democrats are not likely to get behind legislation that seeks to end Obama-era financial regulations, and unless the Durbin Amendment is kept intact, NACS is also not likely to support the bill.