The Tester-Corker Amendment: STOP, STUDY, and START OVER
Unsuccessful 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.
Goals of the Amendment:
- Delay implementation of the Durbin amendment by 12 months.
- Call 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 would have also examined the impact of proposed interchange routing and exclusivity provisions.
- Direct 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:
- Whether the new rules did not take into account all fixed and incremental costs to financial institutions
- Whether new interchange rules would adversely affect debit card consumers
- Whether the small issuer exemption would be possible
Failure in the Senate
On June 8, by a vote of 54-45, the U.S. Senate failed to pass a compromise version of the Debit Interchange Fee Study Act as an amendment of the Economic Development Revitalization Act (S. 782). The legislation would have required a study into the unintended consequences that have resulted from debit interchange price caps mandated by the Durbin Amendment to the Wall Street Reform and Consumer Protection Act (Dodd-Frank). Instead, small businesses, consumers, and community banks are suffering the consequences.