An amendment to delay debit card swipe fee reform was shot down by the U.S. Senate yesterday (June 8) in an action hailed by business trade groups as a victory for small businesses and consumers.
The reform, scheduled to take effect July 21, will dramatically lower debit swipe fees by an estimated 70 percent and slash the charge per transaction to 12 cents from an average of 44 cents.
The Senate's action will save small-business owners and their customers more than $19 billion a year, the International Franchise Association said.
Last year, Congress passed swipe fee reform as a part of the Dodd-Frank financial reform law, which included a requirement that the Federal Reserve Board issue guidelines for ensuring that the debit card swipe fees charged by the largest banks are reasonable and proportional to their total cost.
The defeated Tester-Corker amendment, S. 575, would have delayed reform for six months.
"We are grateful to the senators for standing up for small franchised businesses and their consumers by opposing efforts to derail swipe fee reform," Steve Caldeira, IFA president, said in a statement. "The current level of unpredictability and uncertainty in the debit swipe fee market puts a real strain on the ability of franchise business owners to hire new workers."
The National Retail Federation (NRF) agreed, hailing the vote as a landmark victory for American consumers.
"With the economy still trying to gain momentum and consumers facing skyrocketing costs for necessities like food and fuel, this badly needed reform will help ensure our nation’s economic recovery ," said Matthew Shay, NRF president. "It will prevent more than a billion dollars a month from being pocketed by big banks and, in turn, allow retailers to hold down prices for consumers.
"Congress came to the right conclusion last year — hidden swipe fees charged by big banks have driven up prices far too much for far too long. The National Retail Federation and America’s retail merchants commend the Senate for standing by last year’s vote and for voting on the side of American consumers."