Wednesday, March 16, 2011

Bank of America (BAC), JPMorgan (JPM), Citigroup (C) Get "Swipe" Rule Reprieve

Major American bankers like Bank of America (NYSE:BAC), JPMorgan Chase & (NYSE:JPM), Citigroup (NYSE:C) and Wells Fargo (NYSE:WFC) are getting a temporary break on the proposed cap debit-card “swipe” fees, as a group of nine Senators signed onto legislation which will delay the enactment of the proposal for a couple of years.

Senator Jon Tester, a Montana Democrat, today introduced the bill that would put off implementation of the rule, which has pitted lobbyists for retailers Wal-Mart Stores Inc. (NYSE:WMT) and Target Corp. (NYSE:TGT) against financial-industry groups.

The rule, developed by the Fed under the mandate of the Dodd-Frank regulatory overhaul, would allow card networks to charge retailers a maximum of 12 cents per transaction. Issuers could lose $12 billion in annual revenue under the change.

“We need to understand that we’re not repealing this rule,” Tester said in an interview. "We’re going to delay it, we’re going to study it and we’re going to take a look at it to make sure it is what it is advertised as.”

Tester’s legislation would delay the Fed rulemaking for two years. During that time, a joint study of the rule’s impact would be conducted by the Fed’s board, the chairman of the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the chairman of the National Credit Union Administration.

House Republicans are close to introducing a similar bill that would delay the proposal for a year and would require the same agencies to conduct the impact study.




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