It was Wal-Mart vs. Wall Street today in the Senate, in the most expensive, heavily lobbied debate in years. And on this one, Wal-Mart (and, oddly, consumers) won, 54-45 (under the rule, the bill would have required 60 votes to pass).
The vote was on a bill authored by Sen. Jon Tester (D-MT) to delay a provision of the Dodd-Frank financial reform law that caps the amount that banks can charge merchants for processing debit card transactions, the so-called swipe fee. Dodd-Frank instructs the Federal Reserve to determine the cap, and it's proposed capping fees at 12 cents per transaction. Banks currently charge 44 cents per transaction, which nets them about $16 billion annually. It also costs the consumer about $230 annually in passed-on price increases.
The showdown pitted Dem against Dem on the floor.
[T]he Senate's chief proponent of lowering the swipe fees, Sen. Richard Durbin, D-Ill., said that taxpayers had helped banks "in their darkest hour," a reference to the $700 billion financial industry bailout of 2008. He said banks showed their gratitude by showering huge bonuses on their executives.
"Honestly, are we going to stand here and say we can't protect small businesses across America struggling to survive?" said Durbin, the Senate's No. 2 Democratic leader.
Responding later, a leader of the drive to prevent the Fed from capping the fees also sought to appeal to everyday Americans, saying he was fighting for small community banks and credit unions, not the nation's biggest financial institutions.
"These small guys who had nothing to do with the financial crisis do not have that same flexibility the Wall Street banks have" to make up for lost debit card fees by finding revenue elsewhere, said Sen. Jon Tester, D-Mont. "and these are the banks in Montana. These are the folks that I want to make sure have a fair shake."
Of course, the Wall Street guys benefit, too, which was the force of Durbin's argument against the Tester bill, because Tester didn't limit his bill to the small, community banks, which might have made his bill more popular back home, where "[t]hree-quarters of Montana voters support the swipe fee reform that Tester is trying to delay."