WASHINGTON (AP) – Restaurants, grocers and other businesses celebrated on Thursday as House Republicans backed off efforts to eliminate the cap on fees that banks can charge retailers when customers use a debit card.
The chairman of the Financial Services Committee, Rep. Jeb Hensarling, R-Texas, had pushed for scrapping the limit as part of his legislation to gut the Dodd-Frank law, the strict financial rules established after the 2008 financial crisis and the Great Recession. Big banks have lobbied strenuously against the cap, arguing that it hurts financial institutions while giving a break to retailers.
The issue, however, divided congressional Republicans and had forced the leadership to delay a vote on Hensarling’s bill. But late Wednesday, Hensarling said he would cut the debit-card cap provision from his bill, clearing the way for a House vote after lawmakers’ week-long Memorial Day break.
“I can perform simple math,” Hensarling said Thursday of his decision, a clear reference to lacking the votes.
When Congress responded to the 2008 financial crisis, it capped the debit card fee as a way to lower costs for businesses. The cap was established through what is often referred to as the Durbin amendment, named for Sen. Dick Durbin, D-Ill.