Swipe Fee Amendment Hated By Credit Cards Providers Will Remain In Wall Street Bill, Says Dodd
A provision despised by credit card companies will remain in the final Wall Street reform bill that emerges from conference committee negotiations, Sen. Chris Dodd (D-Conn.) told reporters Monday evening.
Dodd, who is leading conference negotiations for the Senate, said that changes will likely be made to the "swipe fee" amendment that was included in his chamber's version. Sponsored by Sen. Dick Durbin of Illinois, the number two Democrat, the amendment would reduce the fees that credit card companies can charge to retail stores for using the cards. The current fee far exceeds the cost of the transaction, which stores pass on to consumers. The fee is a lucrative source of revenue for credit card companies and hated by merchants.
Once the amendment was adopted, the trade association representing merchants endorsed the reform effort. It has long been a priority of the merchant lobby but they have had little success until now.
"We didn't even try to deal with that in the credit card bill a year ago because it is complicated," said Dodd. "But right now consumers get whacked because of how retailers are treated by the credit card industry."
Durbin has been in discussions with Financial Services Committee Chairman Barney Frank (D-Mass.) to win House backing for his provision.
Consumer advocates drove support for the measure. "In North Dakota, I had thousands of constituents contact me asking me to vote for the Durbin amendment," said conservative Democratic Sen. Kent Conrad, calling the credit-card fee provision "very important."
Dodd said the current system is untenable, but Durbin's provision will be adjusted. "There's been an effort to narrow things in a way that may need a little more work before it's done. But I can't imagine that provision coming out of this bill. Literally there are million of retailers who pay an awful price every day for the surcharges that affect salaries by the credit card industry. So I think it's going to stay with some modifications," Dodd said.
Lucia Graves contributed reporting