Despite a bipartisan majority in the Senate, an amendment sponsored by Senators Jon Tester(D-MT) and Bob Corker (R-TN) that would have delayed a controversial provision of the Dodd-Frankfinancial reform law failed to garner the 60 votes necessary for passage. The provision allows the Federal Reserve to set price controls on debit card transactions far below market rates, an idea that NTU believes will harm both consumers and banks.
NTU supportedthe amendment, fearing that pushing ahead with any hastily thought out price controls maylead to a rash of unintended consequences. Among our many concerns were that banks would be forced to offer fewer and less diverse debit card offerings, that consumers may see the elimination of services like free checking, and that small, community banks may find themselves unable to compete.
Although the amendment failed to reach its 60 vote thresshold, NTU applauds the bipartisan majority of 54Senators,who voted in favor of allowing time for a thorough study of the potential impacts of putting price controls on debit fees. Asthe amendment's sponsor Senator Tester said on the Senate floor earlier today, “Let’s make sure we get it right. If we’re going to createregulations, let’s do it in a way that’s fair and consistent with the intent.Let’s not try to solve one problem and create three others.”
In particular, NTU was pleased to see that 19 Democrats voted in favor of the amendment, many of whom voted for the Dodd-Frank financialreform bill. The debit interchange fee is only one provision of Dodd-Frank thatmay lead to adverse consequences for taxpayers. We hope that today’s votesignals a willingness to review, delay, and if need be, overturn, additionalDodd-Frank regulations that present a costly and harmful drag on our economicrecovery.
In a limited number of instances carefully crafted regulatorypolicies can set sensible guidelines that help the market flourish. However, asNTU has often mentioned, far too many regulations contained in Dodd-Frankextend the heavy hand of government so far into the private economy as tofundamentally destroy the power of the market. NTU looks forward to workingwith Senators from both sides of the aisle to further identify and clear away unnecessaryregulations, streamline the rules that remain, and empower investors to makeinformed choices.