It may be about Round 100, but Sen. Dick Durbin, D-Ill., shows no signs of fatigue in his seemingly never-ending battle with banks over debit-card processing fees.
Bank of America’s decision last week to impose a new $5 monthly debit-card fee—which it blamed on a financial-reform provision authored by Durbin—assures that the banks versus retailers/Durbin grudge match will continue.
So far, Durbin is winning the public-relations battle, with consumer groups and, indirectly, President Obama, defending him from Bank of America’s claim that the measure capping how much banks can charge retailers to process debit-card transactions is translating into higher fees for consumers.
“We are getting to the point where Bank of America is scared that this a fee too far,” said Ed Mierzwinski, consumer-program director for the U.S. Public Interest Research Group, which joined merchants in the fight for Durbin’s “swipe fee” amendment. “How many times did taxpayers bail them out?”
Republicans are trying to get traction on the issue. The office of House Majority Leader Eric Cantor, R-Va., sent reporters an e-mail titled “Courtesy of Sen. Durbin” right after Bank of America announced the fee.
“At the end of the day, no one is getting elected over debit interchange,” said Jaret Seiberg, a policy analyst with MF Global’s Washington Research Group. “Voters are worried about much more basic threats, such as the ability to keep their job, stay in their home, and support their kids.”
Ed Mills, a policy analyst with FBR Capital Markets & Co., said Bank of America has the most to lose. “From a PR standpoint certainly the biggest impact is to Bank of America,” he said. “The swift, negative, viral reaction to that announcement is going to make other banks think twice about rolling it out.”
It could even be a boon for Durbin in the form of a campaign-cash windfall, particularly if the majority whip pursues legislation to expand his initial measure to include credit cards. “It’s a great fundraising opportunity,” Seiberg said. “There is no downside for Durbin. He’s made his career for the last few years on being the one who takes on the banks. There is only upside for Senator Durbin.”
But there is plenty of heat on Durbin, too.
In a scorching editorial last week, The Chicago Tribune dubbed Bank of America’s upcoming charge, the “Durbin fee.” Lawmakers who sided with the banks during the debate are whispering: “I told you so” in response to Bank of America’s decision to charge consumers $5 a month for debit cards that are used for purchases. SunTrust plans to start charging fees for debit purchases as well, and JPMorgan Chase and Wells Fargo are running pilot programs.
“It was pretty interesting to see [Durbin] … apologizing to everybody in some ways for the Durbin amendment, which basically shifted money out of the pockets of consumers into the bottom line of Target and Wal-Mart and other entities, so unintended consequences occur,” Sen. Bob Corker, R-Tenn., said during a Senate Banking subcommittee hearing on Tuesday. Corker and Sen. Jon Tester, D-Mont., led a failed effort earlier this year to repeal the Durbin measure.
This article appears in the October 5, 2011 edition of NJ Daily.
DON'T MISS TODAY'S TOP STORIES