A powerful Republican’s pledge to overturn a milestone banking reform law has raised the possibility of letting banks increase the fees they charge restaurants and other merchants to process credit card charges, drawing a counterattack from the industry’s political watchdogs.
The National Restaurant Association, the National Retail Federation and a coalition of other industry lobbying forces, the Merchants Payment Coalition, blasted Rep. Jeb Hensarling’s suggestion that the Dodd-Frank banking reform law be overturned. The law, passed in the wake of the subprime mortgage crisis of 2008 and ’09, limits what banks can do in their pursuit of profits.
Hensarling, R-Texas, is chairman of the House Financial Services Committee, one of the most powerful bodies in Congress.
"Today, Chairman Hensarling announced his intention to repeal hard-fought debit swipe fee reform that has helped to keep costs low for restaurant customers,” Laura Chadwick, director of commerce and entrepreneurship for the NRA, said in a statement. “This measure placed limits on the fees banks charge to process debit card transactions and injected a degree of competition, transparency and fairness where there was absolutely none before.”
The NRF and the MPC were harsher in their condemnation, saying Hensarling wanted a return to the price fixing that once put merchants at the mercy of the major credit card companies. “The Hensarling proposal would promote more price fixing and detract from the few market forces that were actually created on debit card fees,” said Douglas Kantor, counsel to the Coalition.
Despite the fierceness of the response, Beltway watchers noted that a repeal of the Dodd-Frank law and the provision governing swipe fees has slim chances of succeeding in Congress. But the politicking could factor into the presidential race. Donald Trump, the presumptive Republican nominee for the Oval Office, has said he would scuttle Dodd-Frank if elected.