Debit-card debate splits Democrats, forces cautious discussion

“I have the highest respect for Jon,” he added. “We have discussed this and our friendship has remained strong throughout this debate. We just see this differently. Whatever the outcome of this vote, I’m certainly going to continue my strong friendship with Jon.”

Tester is not the only Democrat supporting his language, which is being offered as an amendment to the Economic Development Revitalization Act. Other sponsors are Sens. Michael Bennet (D-Colo.), Tom Carper (D-Del.), Chris Coons (D-Del.) and Kay Hagan (D-N.C.).

The amendment will need the support of more than five Democrats to be approved today, as 60 votes are needed for passage.

After tempering his remarks, Durbin proceeded to harshly criticize the Tester-Corker amendment, which would delay the pending July 21 rule on debit-card fee limits. Durbin said that while the amendment calls for a one-year delay, it does not set a date certain for when the limits might be in place, which raises questions about whether the delay might be longer.

He reiterated that card companies are receiving $1.3 billion each month in debit card fees, which gives them a huge interest in delaying the rule well beyond 12 months. “How long would they like to delay it? Forever,” he said.

Durbin also questioned the amendment’s call for a new study into how to limit debit-card fees, given that the Federal Reserve just spent a year examining the issue in preparation for the July 21 implementation.

On Tuesday, Durbin ripped into banks and said they have lobbied heavily in an effort to simply delay the rule so they can keep collecting fees.

“That’s why they have moved heaven and earth to stop this new rule from going into effect which reduces the fees that these banks … are collecting,” he said. “We’ve got to stop this debit-card amendment. They have spent a fortune lobbying Congress, working the members back and forth.”

On Tuesday, Tester argued that his amendment is meant to help ensure that smaller banks can survive the rule. He noted that Federal Reserve Board Chairman Ben Bernanke said the rule could “result in some of the smaller banks being less profitable and even failing.”

Durbin replied Wednesday morning by saying once the rule is in place, he would be open to further adjustments to ensure smaller banks are not hurt. “When it comes to community banks and credit unions, I think they deserve an exemption — it was included in the law — and if we need to provide any other reassurances after the rule is issued, I’ll be there,” he said.

Last year’s Dodd-Frank Wall Street reform law required the Fed to recommend and put in place a limit on debit-card fees, and exempted banks with assets under $10 billion.