WASHINGTON (AP) — The architect of House legislation that would repeal much of the Dodd-Frank law enacted after the financial crisis agreed Wednesday to make a key change to the bill, clearing the way for the full House to take up the measure in coming weeks.
Rep. Jeb Hensarling of Texas, the Republican chairman of the House Financial Services Committee, said he has agreed to cut from the bill a provision that would have removed a cap on the fee that stores pay large banks when costumers use a debit card. Retailers strongly opposed removing the cap, and that opposition has raised concerns for lawmakers hearing from merchants back in their home districts.
Congress capped the fees as a way to lower the costs for businesses that accept debit cards. The cap was established through what is often referred to as the Durbin amendment, named for Sen. Richard Durbin, D-Ill.
Hensarling said he believes that a repeal of the swipe fee cap belongs in the legislation, but he recognizes and respects that many members of Congress feel differently.
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“We won’t let this one provision hinder passage of an important priority bill that will end bank bailouts and help renew healthy economic growth for all Americans,” Hensarling said.
The bill passed Hensarling’s committee in early May in a party-line vote. Democratic lawmakers are overwhelmingly opposed to the bill and GOP disagreement over the cap’s possible repeal was preventing party leaders from bringing the bill up on the House floor. While passage of the Financial Choice Act has been widely anticipated in the House, the Senate is expected to take a much different approach when it revisits changes to the Dodd-Frank law over the coming months.
Trade groups representing retailers applauded Hensarling’s decision.
“Preservation of swipe fee reform is an important victory for retailers and consumers who would have faced higher fees from the country’s largest banks with every swipe of a debit card,” said Austen Jensen, a vice president at the Retail Industry Leaders Association.
The American Bankers Association had told lawmakers that Hensarling’s legislation contained many provisions that its member banks have long supported. At the top of the list was repeal of the Durbin amendment, calling the promise that savings would be passed on to consumers “hollow.”
The banking group said “this price control amendment has only harmed consumers by reducing access to low-cost banking accounts for those that need them most.” The group has urged lawmakers to keep the repeal of the Durbin amendment in the bill.