On Capitol Hill, Part 2 Swiping Against Big Banks
A veteran NACS lobbyist fights his toughest political battle yet
WASHINGTON, D.C. -- On weekends, Lyle Beckwith heads to his rural retreat to think strategy. "I need the quiet. The space lets me think about the best way to respond to the arguments of the other side," he told CSP Daily News during a recent visit to Washington, D.C., pausing from shuttling from one Congressional office to the next.
The "other side," in this case, includes Visa, MasterCard and the nation's largest banks, which are trying to preserve a cost structure that allows them to collect an average 1.5% fee per debit transaction.
As noted in yesterday's [image-nocss] CSP Daily News, the banks have gained some momentum recently to delay implementation of the Durbin Amendment, which would cap debit-card swipe fees at a rate set by the Federal Reserve.
Just this week, Sen. Jon Tester (D-Mont.) introduced a bill that would delay the amendment by two years. And on Wednesday, Rep. Shelly Moore Capito (R-W.Va.) offered up a version that would delay the measure by a year to allow for an impact study on how the changes might affect consumers, merchants and small financial institutions.
Why the urgency? Because the Federal Reserve is expected next month to propose capping debit swipe fees at 12 cents per transaction, with the rule taking effect on July 21. The banks, faced with losing billions of dollars, are tapping their arsenal of lobbyists to halt the Durbin Amendment in its tracks.
The past two weeks--and likely for the weeks leading to the July 21 deadline--NACS and the broader Merchants Payments Coalition are countering the offensive with a Capitol full-court press to ensure the banks do not reach the necessary 60 senators to overturn the Durbin Amendment. They have taken out ads, including this week in Beltway-favorite, Politico, with the message, "Haven't We Bailed Out the Big TARP Banks Enough "
And they have Beckwith, the dean of NACS' government relations team, canvassing Congress, trying to secure support from key senators and representatives who are feeling pressure to stall the amendment.
"It's an old D.C. trick to delay and do a study. It's a kill bill," he said of both the Tester and Capito proposals.
Central to the banks' arguments is that the Durbin amendment will hurt credit unions and community lenders, and that the lost debit-card revenue will force many banks to impose checking and other nuisance fees on customers.
To those arguments, Beckwith responds with a charge of diversion and distraction. The natural competitive forces that keep strong retailers from overcharging customers will likewise play out in the banking arena, thus protecting consumers from a weed field of new fees.
And the Durbin amendment specifically protects smaller institutions by exempting those with less than $10 billion in assets from the rule.
But at the end of the day, he said, it's not the arguments that are driving the financial institutions like Bank of America and JPMorgan Chase. "They just don't like to lose," Beckwith said.
Faced with one of his toughest political battles, Beckwith, the combative senior lobbyist who has scrapped and wrestled on behalf of the c-store industry for more than 25 years, is suddenly reflective.
"After eight years of work, we could lose," said Beckwith, who escapes the hustle and bustle of the Hill to his small farm in Virginia on weekends. "It [won't be] because we don't have the arguments. We're right on this one."
Editor's Notes: This is the second report from 24 hours on the Hill with NACS and other trade media. Click here to read part 1: Defeating 'Delay & Derail.'