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UPDATE 1-US Senate must act first on debit card fees-Bachus
March 7, 2011 / 8:00 PM / in 7 years

UPDATE 1-US Senate must act first on debit card fees-Bachus

* House will not advance bill Senate will not pass-Bachus

* Banks want debit fee crackdown changed or delayed (Adds quote from Bachus, background, byline)

By Dave Clarke

WASHINGTON, March 7 (Reuters) - Republicans in the U.S. House of Representatives will not try to stall or change a crackdown on debit card fees unless the Senate supports changing the law, House Financial Services Chairman Spencer Bachus said on Monday.

The debit card fee provision was added to the Dodd-Frank financial reform law by the Senate, and the Senate must act first and take “ownership” of the issue before the House acts, Bachus told the Institute of International Bankers conference.

“We are saying to the Senate: ‘Give us an indication on whether there is going to be action taken, '” he said.

Banks and retailers are waging a furious lobbying fight over “interchange” fees, which merchants pay banks and credit-card networks every time a customer buys something with a debit card. The fee crackdown is required by the Dodd-Frank law.

In December the Federal Reserve proposed capping interchange fees at roughly 12 cents per transaction -- a 75 percent drop.

A cap at this level would cost banks about $13 billion in annual revenue, according to

Banks and card companies have been pushing lawmakers to delay the law or require the Fed to consider more costs when establishing the cap so that it can be set at a higher level.

The final rule on the fees is due in April.

The crackdown on debit card fees was written by Richard Durbin, the No. 2 Democrat in the Senate, and stalling or changing it in the Democrat-controlled Senate will likely be difficult. (Reporting by Dave Clarke, Editing by John Wallace)

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