The banking industry refuses to go down without a fight.
Fresh off its loss in the Senate last week over delaying proposed limits on swipe fees for debit cards, which was part of the sweeping financial reform bill passed last year, industry lawyers and executives are planning their next step: taking the matter to the courts.
The proposed rule, known as the Durbin Amendment, allows the Federal Reserve to regulate the fee banks rack up every time a debit card is swiped. In December, the Fed proposed a cap of 12 cents a transaction. The rule is set to take effect July 21.
Once the Fed issues its final rule, Wall Street plans to allege in court the Fed has misinterpreted the law, The Wall Street Journal reported. The Fed should never have imposed a hard cap on fees and that the cap it did impose is illegally low, the banksters plan to argue.
Rep. Shelley Moore Capito (R-W.Va.) in March introduced legislation to delay the swipe fee rule, but the Senate voted her down last week. Public Citizen applauded the Senate’s effort. (Fun fact about Capito, the chair of the House banking subcommittee: Her husband manages several offices for Wells Fargo. Public Citizen has called on her not once, but twice, to disclose that.)
Four banks alone account for $8 billion of the $16 billion in annual swipe fee profits. And only banks with more than $10 billion in assets are subject to the cap. Clearly, the banking titans aren’t hurting for the extra change they pocket each time we swipe our debit cards. Public Citizen will keep fighting to cap swipe fees, no matter what it takes.