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The Tester-Corker Amendment:
STOP, STUDY, and START OVER

Bi-Partisan Amendment to S. 782 - the Economic Development Reauthorization Bill

Senators Jon Tester (D-MT), Bob Corker (R-TN), Kay Hagan (D-TN), Tom Carper (D-DE), Mike Crapo (R – ID), Roy Blunt (R-MO), Jon Kyl (R-AZ). Chris Coons (D-DE) and Michael Bennet (D-CO) introduced a bi-partisan amendment to S. 782 - the Economic Development Reauthorization Bill, on June 7, 2011 to delay the implementation of the Fed’s proposed debit interchange regulation.

Read the legislation »

The bipartisan bill received nine cosponsors from both sides of the aisle.

This bill would go a long way towards fixing a piece of failed legislation that would have had drastic impacts on consumers and the economy and marks a major compromise since the authors first introduced legislation in March.

Specifically, this amendment:

  • Shortens the delay of implementation to 12 months. The original legislation called for a 24-month delay.
  • Calls for a 6-month study of all of the costs associated with debit transactions, the impact on consumers and the "small issuer exemption" (for financial institutions with less than $10 billion in assets). The study will also examine the impact of proposed interchange routing and exclusivity provisions.
  • Directs the Federal Reserve Board, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the National Credit Union Administration to determine:
    1. Whether the new rules do not take into account all fixed and incremental costs to financial institutions
    2. Whether new interchange rules will adversely affect debit card consumers
    3. Whether the small issuer exemption would be possible

    If the Fed and at least one other regulatory agency – the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency and the National Credit Union Administration – make any of the above determinations, then the Fed must rewrite debit interchange rules within 6 months – taking into account all costs. If none of the above determinations are made, then the current rules would move forward.

  • Establishes a process to review whether the exemption for small issuers is working two years after implementation. This process directs the Fed to examine the debit interchange market and the effectiveness of the small-issuer exemption, then report to Congress on its findings and provide recommendations to address any harm to those banks.

As stated by Former Chairman Frank, Fed Chairman Bernanke, FDIC Chairman Sheila Bair, The Comptroller of the Currency and every other major financial regulator in the nation, the Fed's ruling on the Durbin amendment would not have protected small financial institutions as it was intended to do. Instead it would have threatened debit cards, a form of payment that consumers around the country have come to rely on. (read more)

Senator Tester Speaks on the Amendment »
Read CUNA’s supportive statement of the amendment »
Read ICBA’s supportive statement of the amendment »
More information on the Fed Rule »

News on the Tester-Corker Amendment