Retailers won another battle against the banks earlier this month as the U.S. Senate rejected an amendment that would have delayed the implementation of the "swipe fee" rule, which will cut the fees retailers pay banks when consumers use debit cards to make purchases. The amendment went down to defeat on a 54-45 vote, in which the yeas were six short of the super-majority needed for success.
Both sides were quick to issue press statements: the banks weeping, wailing and predicting disaster for consumers; the retailers cheering, gloating and claiming a victory for consumers as well as themselves.
Frank Keating, CEO of the American Bankers Association, said the group was "deeply disappointed" and the failure of the amendment was "a dark day" for banks that issue debit cards and consumers who use them.
"American consumers will now have to pay more for basic banking services, while big-box retailers go off and count their unjustified profits," Keating declared.
Matthew Shay, CEO of the National Retail Federation, called the vote "a landmark victory" for consumers and said the "badly needed reform" would "prevent more than a billion dollars a month from being pocketed by big banks and, in turn, allow retailers to hold down prices for consumers."
The controversial rule, written by the Federal Reserve, is set to become effective July 21.
Consumers might well be weary of all the lobbying and ready for the issue to be settled. But the showdown in the senate might not be the end of the road for the banks.
That's because the ABA is keeping up the pressure on the Fed to alter the rule before the effective date and TCF National Bank, a subsidiary of TCF Financial Corp. in Wayzata, Minn., has already charged forward on another front, suing the Fed over the rule. According to a company statement, TCF has $18.5 billion in total assets and approximately 440 branches in Minnesota, Illinois, Michigan, Colorado, Wisconsin, Indiana, Arizona and South Dakota.
Whether other banks will also take the fight to the courts remains to be seen.
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