Five Years Later: Swipe Fee Reform is a Success Jul 29, 2015 By: Hannah Walker, Director of Government Relations, Food Marketing Institute As a body, the Senate is known for its decorum and more thoughtful collegiality than its neighboring lower body, the House of Representatives. Senators refer to each other as their “esteemed colleague” or “good friend,” no matter how vehemently they may disagree on an issue. When a Senator is impassioned enough to say, tear a bill in half, it certainly attracts attention and turns some heads. So last week, as the Senate Appropriations Committee completed consideration of its twelfth and final appropriations bill, FMI and other merchant groups took notice and joined in a collective cheer as Senator Dick Durbin (D-IL) tore the FY 2016 Financial Services and General Government Appropriations bill in half after the committee passed it on a party-line 16-14 vote. Senator Durbin objected to the inclusion of Banking Chairman Richard Shelby (R-AL)’s Financial Regulatory Improvement Act (S. 1484) in the appropriations bill. FMI, as part of the Merchants Payments Coalition (MPC), also expressed our objection to the inclusion of Chairman Shelby’s bill. The highly controversial banking bill contained very troublesome language that could open up the Durbin amendment swipe fee reforms for weakening or repeal. The bill aims to index the $10 billion threshold for banks to be covered under the Durbin amendment cap and tie it to the GDP. While on its face, this may not seem too concerning, but FMI was quick to point out that the current cap already excludes over 98 percent of banks in the United States. Additionally, once you open that section of the Dodd Frank bill up for amending, it increases the risk for further shenanigans, such as full repeal, or increasing the threshold to an even higher number, such as $20 billion. This month marks the five-year anniversary of Dodd Frank being signed into law. Everyone agrees, there are some pieces that may have had unintended consequences and should be examined, but that is far from the case with the Durbin amendment swipe fee reforms. Study after study has shown that the sky did not fall, and the American consumer has benefited from these reforms. We also know that if the Federal Reserve would have set the fee cap between 7 and 12 cents as originally proposed, consumers and merchants would have saved more. Regardless of this missed opportunity, we know free checking did not go away, small banks benefited and large banks are still making record profits. Senator Durbin knew his amendment worked, and the facts prove it, so when he tore the bill in half he made a clear statement that he and the merchant industry will continue to protect this hard fought win. The fight is not over. Just last week House Financial Services Chairman Jeb Hensarling (R-TX) blasted the Durbin amendment in an op-ed, wrongly blaming it for the reduction in free checking. Senator Durbin quickly responded with his own op-ed, countering Chairman Hensarling’s assertions with indisputable facts. Senator Shelby is determined to bring his banking bill to the Senate floor as either a standalone bill or as part of the appropriations bill. FMI is forever grateful for the hard work and passion our members showed five years ago to push the Durbin amendment over the line and thankful for amazing partners on Capitol Hill like Senator Durbin. Senator Durbin ripping the bill in half last week was a great reminder that we must stay vigilant, make some noise, turn a few heads and maintain the commitment and passion that successfully took on the financial services giants just five years ago.