Debit-limit debate starts anew with delay bill

“We need to make sure we stop and study these proposed rules before implementing anything,” he added.

One of the key proponents of the provision, Rep. Peter Welch (D-Vt.), is not buying the measure as a call for further study, however.

“In Washington, delay means derail, so it’s a polite way of trying to kill very good legislation,” he told The Hill. Welch sponsored the House version of the provision.

The provision, named the Durbin amendment after author Sen. Dick Durbin (D-Ill.), was a controversial late entry into the Dodd-Frank financial reform law. The provision requires the Fed to limit debit card fees, and in its December proposal, the Fed suggested capping fees at seven to 12 cents per transaction — a 73 percent drop from the current 44-cent average.

Banks have cried foul at the rule, calling it governmental price-fixing, while merchants say it is long overdue, as they accuse banks of driving up fees to pad profits.

The legislation introduced by Tester and others has predictably won the praise of bankers and the scorn of retailers.

“We support any legislation that will study the effects this will have on consumers,” said Richard Hunt, president of the Consumer Bankers Association. “We do not believe the United States government should be setting prices.”

“This amendment is a slap in the face for small business owners and consumers across the country,” said Lyle Beckwith, senior vice president of government relations for the National Association of Convenience Stores.