Monday June 06, 2011 | 05:08 PM


The inside-the-beltway battle over debit card “swipe fee reform” is coming to a Maine TV set near you.
A lobby group representing retail merchants is running television ads calling on Sens. Olympia Snowe, R-Maine, and Susan Collins, R-Maine, to vote against a measure putting on hold for at least 15 months lower debit card interchange fees, the price paid by merchants to banks when consumers use debit cards to purchase goods.
The ads in Maine are being run under the auspices of the Maine Merchants Association and the national group Merchants Payments Coalition. The coalition is an organization of national retailers that is running similar ads in other states where senators are thought to be key votes on the issue.
Maine small business owners are grateful to Senators Collins and Snowe for their continued support for small businesses and for their support on this important issue,” said Maine Merchants Association Executive Director Curtis Picard, in a release announcing the ads. “Repealing these reforms now, just weeks before they’re scheduled to take effect, would be devastating to thousands of small businesses and consumers here in Maine who are counting on the relief. Every additional dollar that is swiped from our small businesses is a dollar that can’t be spent creating jobs or saving customers money.”
A limit on so-called swipe fees was put in place by a broader Wall Street financial regulation reform bill passed last year, legislation that Collins and Snowe both backed.
Retailers say major banks are making billions of dollars in profits each year off the swipe fees and that while a debit transaction costs only 4 cents to process, merchants are being charged on average 44 cents a transaction. That fee could be capped to about 12 cents per transaction, according to rules the Federal Reserve has proposed for when the swipe fee overhaul goes into effect on July 21.
But a lobby group representing the banks says Collins and Snowe should vote to put the lower fees on hold while the issue is studied further, asserting that smaller and community banks could be hurt and that consumers would not see any savings, just the retailers. The banks say an exemption for smaller banks would not work, because while the smaller banks could charge higher fees retailers might choose not to take those debit cards, and the banks also charge that much of the money they derive from swipe fees goes into consumer security measures.
The banks’ lobby group, the Electronic Payments Coalition, is citing a May 12 exchange between Federal Reserve Chairman Ben Bernanke and Sen. Jon Tester, D-Montana, one of the authors of the legislation proposing to put a 15-month hold on the lower swipe fees law taking effect, where
Bernanke said there is “good reason to be concerned” that the way the new swipe fee law is going into effect could harm smaller banks.
“It’s going to affect the revenues of the small issuers and it could result in some smaller banks being less profitable or even failing,” Bernanke said.

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Kevin Miller is Washington bureau chief for the Portland Press Herald and MaineToday Media. He has worked as a journalist in Maine for 6 ½ years, covering the environment, politics and the State House. Before arriving in Maine, he wrote about politics, government and education for newspapers in Virginia and Maryland.
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