It’s the classic underdog story: The scrappy little guy stands up to his larger, stronger foe. In the movies, it’s usually a safe bet that the little guy comes out on top.
But this isn’t the movies. It’s Main Street vs. Wall Street—c-stores vs. the banks—and the big guy packs a wallop.
“We have the jobs, the employees and the voices, but they have to be engaged and they have to be geared up,” says Anna Ready, director of government relations for NACS, Alexandria, Va. “Every member of Congress has retailers in their district. We just have to activate everyone.”
Ready has helped lead efforts by NACS and other members of the Merchant Payments Coalition—an association of retail industry groups working for swipe-fee reform—to halt a rollback of the Durbin Amendment. This 2010 addition to the Dodd-Frank Act was designed to protect retailers from exorbitantly high swipe fees from credit-card companies.
The tug of war over the Durbin Amendment began in September 2016 when Rep. Jeb Hensarling (R-Texas), chairman of the House Financial Services Committee, introduced a bill titled the Financial CHOICE Act, which (among other actions) was proposed to repeal the Durbin Amendment.
The executive summary of Hensarling’s bill describes the Durbin Amendment as a “price-fixing scheme that picks winners and losers in the marketplace,” and claims it provides “no discernable benefit to retail consumers.”
Ready describes Hensarling’s bill from last year “more as a messaging bill,” because President Obama would not repeal parts of Dodd-Frank, legislation Obama supported. The Financial Choice Act did not make it through the House, but the White House’s position on Dodd-Frank changed with the inauguration of President Trump.
“It went from being a messaging bill to something that [Hensarling] now sees has the potential to move through Congress and possibly to the president’s desk,” Ready says. Trump has never taken an official position on the Durbin Amendment, but NACS anticipates that Hensarling will soon introduce
legislation that includes language to fully repeal debit swipe-fee reform.
The ensuing legal battle will pit retailers against the largest banks and credit-card companies in a rehash of the fight to pass the original amendment.
“It was one of the most dirty, toxic advocacy battles in D.C. seven years ago,” Ready says. “We can’t sit back and let the other side win.”
But Ready and others lobbying on behalf of the retail industry fear that the “other side” is well equipped to aid in the repeal of the Durbin Amendment.
“The banking industry has a lot of clout in Washington, D.C.,” says Ed Weglarz, director of petroleum for the Associated Food and Petroleum Dealers, West Bloomfield, Mich. “It’s sort of like a David-and-Goliath operation, trying to over- come the influence of the banks. You’ve got to keep scratching away at it, getting a little bit each time.”
Another challenge for retailers is keeping Congress informed.
“One of the problems you have is that when Congress changes, you have to educate the newbies, and that often takes a lot of time,” Weglarz says. He suggests retailers invite representatives to a meeting at one of their c-stores. It may make an impression on the representative, he says, and it gives retailers the chance to go through their balance sheets with their representatives and show them how swipe fees affect their bottom line.
Ready agrees, saying retailers “need to explain why this issue is so important. ... If you repeal debit reform, you’re taking money out of their businesses and from their customers, and putting it in the hands … of the largest banks.”
If a face-to-face meeting is not possible, Ready advises retailers to call their representatives. She also cites a link at the bottom of the nacsonline.com home page where retailers can send a letter about swipe-fee reform to their representative in less than two minutes.
Ready and Weglarz feel that the c-store industry can bend lawmakers’ ears enough to stop Hensarling’s impending bill from becoming law, but both acknowledge it will take concerted effort from retailers.
“We have to activate as an industry,” Ready says. “I’m confident that we can keep debit reform intact, but it is going to take retailers, employees and trade associations aggressively advocating to keep it intact.”
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