Senate Rejects ‘Swipe Fee’ Proposal

by Andrew Stiles

The Senate on Wednesday rejected by a vote of 54 to 45 a proposal to delay further regulations on debit card fees. The measure, sponsored by Sens. Bob Corker (R., Tenn.) and Jon Tester (D., Mont.), would have prevented the Federal Reserve from imposing limitations on the “swipe fees” that banks and credit card companies charge retailers every time a customer uses a debit card. Sixty votes were required for passage.

The vote was a significant victory for retail merchants in a heavily-lobbied battle against the banking industry, as well as for Sen. Dick Durbin (D., Ill.) who authored the original provision in the Dodd-Frank financial overhaul bill passed last year. It was a bipartisan vote, with 19 Democrats joining 35 Republicans who voted yes, and 12 Republicans voting no along with 33 Democrats.

The Hill reports that Tester’s support for the measure, even though it failed, likely helped him shore up his campaign war chest as he prepared for a tough reelection fight in 2012:

The policy fight triggered the biggest K-Street battle of the year and may have helped Tester collect tens of thousands of dollars in contributions from banking interests.

Public fundraising records show Tester collected nearly $60,000 in contributions from credit card companies and other opponents to proposed caps on swipe fees in the 17 days following the introduction of his legislation.

Speaking before the vote, Tester downplayed the influence of banking lobbyists and contributions.

“Look at me. Do I look like a banker?” said Tester, a burly farmer who still sports a flat-top. “Senator Corker and myself drew this amendment up. The banks did not draw up this amendment.”

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