How One Congressional Bill Could Impact Your Bottom Line

How One Congressional Bill Could Impact Your Bottom Line
Posted: May 16, 2017
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By John Chwat, ESA Director Government Relations

Buried within a 600-page bill, that is moving through the Congressional legislative process and aimed at repealing or amending much of the Dodd-Frank financial reform legislation in 2010, is a provision that might have a key impact on small businesses within the industry, especially if a credit or debit card is used for customer purchases. 

As part of a major financial system reform bill, called the “Financial Choice Act of 2017, “  H.R. 10 by Rep. Jeb Hensarling (R-TX)  includes language that repeals a limit placed in 2010 by Congress on debit swipe fees. 

Section 735 of H.R. 10 titled, “Prohibition of Government Price Controls for Payment Card Transactions,” eliminates in one sentence the current cap of $.21 for debit card interchange fees (swipe fees).  This cap was a part of what became known as the “Durbin Amendment” named after Sen. Dick Durbin (D-IL).  Before this provision was passed by Congress fees ranged upwards to $.45 and were set into place by major credit card companies and agreed to and implemented by banks.  The National Retail Federation (NRF), which was not invited to testify at a Committee hearing on April 26th, submitted a written statement, which stated in part: “As to debit interchange, the law has produced lower fees across the board, saving merchants and their customers more than $40 billion even while providing the regulated banks a 500 percent markup above their costs as calculated by the Fed.”. 

Section 735 has “survived” efforts by retailers to eliminate it from the bill and as of May 5th, the Financial Services Committee passed HR10 with this provision intact in the larger bill.  It will now go to the US House floor for consideration and passage. 

While this one provision is a part of a larger reform effort by a new Congress and Administration to overhaul “Dodd-Frank” financial banking statutes, it has divided much of the business community in Washington, DC and generated major efforts to take the language out of the bill.  The major groups leading the retail effort to remove Section 735 are NRF and the Retail Industry Leaders Association (RILA).   Efforts will now target both the House leadership, especially Speaker Ryan (R-WI) and Majority Leader McCarthy (R-CA), as well as a possible floor amendment to eliminate Section 735 in the House before the Memorial Day recess period at the end of May. 

New efforts to target this provision are also underway by the retail community and others in the US Senate, where there are multiple bills that relate to Dodd Frank Reforms and may include debit swipe card changes. In the Senate, the Committee of jurisdiction is the Senate Banking, Housing and Urban Affairs, chaired by Sen. Michael Crapo (R-ID) and Ranking Minority Member, Sen. Sherrod Brown (D-OH).  The status of this provision is still very much in doubt and will be resolved by the end of this first session of Congress.



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