GOP Durbin Dozen Blocks Dodd-Frank Rollback
Anywhere but the Senate, getting 54 votes out of 100 is a victory. And yesterday, a bipartisan group 0f 54 Senators responded to concerns from community banks, credit unions, entrepreneurs, and consumers and voted for a measure from Jon Tester (D-Mont.) to delay implementation of price controls on debit card interchange fees from the Durbin Amendment of Dodd-Frank.
The bill would have also required certification that the exemption for smaller financial institutions and would work, and that the price controls the banks and credit unions that issued debit cards would be allowed to recover all of their costs, which the 12-cent cap does not allow. By forcing banks and credit unions to reduce debit card “swipe fees” by 75 percent, the Fed rule as it currently stands (which hopefully the Fed will now modify as much as it can to reflect the sentiment of the majority in Congress) would forcibly shift the cost of processing debit cards from retailers to consumers. Consumers are already losing free checking and debit card rewards in anticipation of this rule, and Fed Chairman Ben Bernanke said last month that it may cause smaller banks to fail.
But the GOP pro-price control caucus struck again, defeating a vote that could have been — like the repeal of the 1099 mandate from Obamacare — the first chink in the armor of Dodd-Frank. Last time, 17 Republicans voted with Durbin. This time it was a baker’s dozen. An improvement, but still too many.
So here are the GOP Durbin Dozen:
Saxby Chambliss, R-Ga.
Johnny Isakson, R-Ga.
Richard Lugar, R-Ind.
Charles Grassley, R-Iowa
David Vitter, R-La.
Scott Brown, R-Mass.
Susan Collins, R-Maine
Olympia Snowe, R-Maine
Richard Burr, R-N.C.
Lindsay Graham, R-S.C.
John Barasso, R-Wyo.
Mike Enzi, R-Wyo.
Three GOP members who voted with Durbin the last time showed wisdom and courage in reconsidering their position or at least seeking a delay to minimize the rules’ burden. They are Mike Crapo, R-Idaho, James Risch, R-Idaho, and Roger Wicker, R-Miss.
Some Democrats also showed wisdom and courage. 10 had voted against the Durbin Amendment last year. Nineteen voted for Tester’s measure yesterday to delay it. (Joseph Lieberman, I-Conn., voted against Durbin the first time and missed the vote yesterday.)
Another bright spot is that most of the new or newer Senator voted to delay the price controls. These include Kay Hagan (D-N.C.) and Michael Bennet (D-Colo.), who came to the Senate in 2009. They both cosponsored Tester’s Amendment even though they had voted with Durbin the first time. And Hagan was particularly notable because her GOP colleague in the Tar Heel state, Richard Burr, chose to remain a member of the GOP price control caucus.
There was a pickup against the Durbin price controls in Florida, where Marco Rubio voted yesterday to delay this Dodd-Frank measure that his GOP predecessor, George LeMieux had supported. And in what has to be one of the most amazing acts of political courage in the century, freshman Sen. John Boozman voted for the Tester delay, even though the biggest firm in his state, Wal-Mart, strongly backs the Durbin Amendment.
Another bright spot is how the Center-Right was unified as a coalition against the Durbin price controls. As I noted here at OpenMarket yesterday, “33 leaders of conservative and free-market organizations — from the Competitive Enterprise Institute and Americans For Prosperity to the Christian Coalition — signed a letter supporting measures to delay the Durbin Amendment. And Americans for Tax Reform and the 60 Plus Association are both scoring a vote in favor of today’s measure from Tester as one of their key votes.”
This was a case — with some of the nation’s biggest retailers supporting price controls — in which even the establishment media could not characterize to pro-market position as “pro-business.” And conservative and free-market groups were almost unanimously on the pro-market side.
Addendum: Upon reflection, I have removed the word “dirty” as an adjective to describe the GOP Durbin Dozen. I am still very angry at these senators’ betrayal of the fundamental free-market principle against price controls. But I did not mean to suggest anything untoward on their part.