Repealing a cap on debit card transaction fees is causing the most friction among House Republicans, who are otherwise largely unified on an extensive bill (H.R. 10) to revamp the Dodd-Frank Act.
The cap, known as the Durbin Amendment, “is probably the single most contentious portion of the bill” among Republicans, House Financial Services Committee Chairman Jeb Hensarling (R-Texas) told reporters April 27. “Probably with the exception of Durbin, I think there is otherwise wholesale enthusiasm on our side of the aisle for pretty much every other aspect.”
The cap pits two powerful lobbying sectors against each other. Banks want to repeal the cap, arguing that merchants haven’t passed savings on to consumers. Retailers say the fee caps promote competition and have saved customers billions.
Two of Hensarling’s top lieutenants on the committee, Reps. Blaine Luetkemeyer (R-Mo.) and Bill Huizenga (R-Mich.), told Bloomberg BNA April 27 they support the repeal.
During an April 26 hearing on the legislation, Rep. Dennis Ross (R-Fla.) said the repeal concerned him because he wants to “maintain debit reform.” He said the fee savings allow small businesses to hire more employees and open new stores.
Hensarling expressed confidence that the legislation, known as the Choice Act, would pass the House “regardless of the outcome of Durbin.”
The committee will mark up the bill May 2 and it could head to the floor in the coming weeks. Hensarling declined to give a timetable for floor consideration.
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