House Financial Services Chairman Jeb Hensarling (D-Texas) says he will drop the repeal of the so-called Durbin Amendment from his Dodd-Frank overhaul plan rather than jeopardize the entire bill.
“I’ve said before that repeal of the Durbin amendment was the most contentious part of the bill among Republicans,” he said, in announcing the decision.
As written, the Durbin amendment, which capped debit card interchange fees, was part of the legislation.
Some supporters had hoped that the Financial CHOICE Act would go to the House floor before the body’s Memorial Day recess, but consideration of the bill was delayed, as GOP leaders gauged support of the repeal.
With Democrats opposing the Financial CHOICE Act, Republicans may have decided that they might not have sufficient votes to pass the bill with the Durbin Amendment intact.
“I believe it belongs in the Financial CHOICE Act, but I recognize and respect that many members of Congress feel differently,” Hensarling said Thursday. “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.”
The issue pitted powerful lobbying interests against one another. Banks and credit unions favored repeal, while retailers opposed it.
CUNA President/CEO Jim Nussle said he understood Hensarling’s decision not to jeopardize the entire bill.
“While we are disappointed that the Durbin repeal language was removed, it is important to keep in mind that there are a number of provisions in the CHOICE Act that would provide relief to credit unions, and that is the ultimate goal of our Campaign for Common-Sense Regulation,” Nussle said.
He added that while the CHOICE Act may not have been the right vehicle for a repeal, CUNA will continue its fight to reverse the cap.
NAFCU agreed.
“We remain committed to the repeal of price caps, and we’re pushing forward in our efforts to get regulatory relief for credit unions,” said Carrie Hunt, NAFCU’s executive vice president of government affairs and general counsel.
Retailers praised Hensarling’s decision.
“Repeal of reform would have allowed banks to return to the uncompetitive market that that allowed them to set these fees as high as they liked,” said Mallory Duncan, senior vice president and general counsel at the National Retail Federation. “The progress that was made toward competition would have been lost, and consumers would have seen nothing but higher prices.”
However, a free market think tank was blunt in its criticism of Hensarling’s decision to drop the repeal.
“The House had a chance to right this wrong, and they blew it,” said Iain Murray, vice president for strategy at the Competitive Enterprise Institute. “It is doubly outrageous that the House GOP has decided price controls are acceptable in what is supposed to be a free economy.”
