The U.S. Senate turned away the concerns of community banks, credit unions and the vast majority of Republican members Thursday afternoon to vote final passage of the financial reform bill by a vote of 60 to 39, sending the measure on for President Obama to sign into law.
The bill, drafted in response to the biggest financial crisis since the Great Depression, would set new guidelines for the trading of financial derivatives, create a systemic risk oversight scheme for huge financial institutions, introduce a consumer financial-protection agency and set new standards for Wall Street rating agencies. It also would establish the Federal Reserve as regulator of interchange fees charged on debit card transactions, according to Credit Union Journal, a Collections & Credit Risk affiliate.
The interchange amendment will direct the Fed to study interchange fees charged by the nation’s biggest card issuers, those over $10 billion in assets, and order they be reduced if found to be unfair. All but three credit unions would be exempt from the provision, but credit union representatives assert they will be unwittingly drawn in anyway because they will be forced to lower their own interchange fees to compete with big banks if the big banks are ordered to reduce their fees.
The amendment also allow retailers to encourage consumers to use cash or lower-cost cards for transactions, something the two dominant card networks, Visa and MasterCard, currently prohibit by threat of fines.