STEVE INSKEEP, host:
Banks have suffered a big setback in their effort to delay the government from capping lucrative swipe fees. Those are the fees that retailers pay banks every time that a customer swipes a debit card.
The Federal Reserve plans to put the new limits into effect next month. Banks lobbied hard for a delay, but retailers also lobbied hard.
And as NPR's David Welna reports, in a Senate vote yesterday, the retailers prevailed.
DAVID WELNA: Montana Democrat Jon Tester cosponsored the measure that would have required the Fed to study, for another six months, the impact of capping debit card swipe fees, and then spend six more months writing new rules.
Senator JON TESTER (Democrat, Montana): If we're going to be regulating this market, we need to be fair about it.
WELNA: But fellow Democrat Dick Durbin of Illinois led the floor fight against Tester's measure. Durbin was defending the rule he sponsored last year in the Dodd-Frank financial regulatory overhaul that calls on the Fed to set new limits on swipe fees next month.
Senator DICK DURBIN (Democrat, Illinois): Otherwise, we are sending a massive, massive subsidy through the biggest banks on Wall Street, up to $8 billion a year that they collect in these debit card interchange fees at the expense of small businesses and consumers all across America.
WELNA: The Fed found late last year that banks charge merchants an average of 44 cents for every debit card swiped. That's the world's highest rate. The Fed will likely cap those fees at 12 cents a transaction, but only for banks with more than $10 billion in assets.
David Welna, NPR News, the Capitol. Transcript provided by NPR, Copyright NPR.
