The Senate Rebukes The Big Banks

In a bipartisan vote last Wednesday, the U.S. Senate dealt a blow to big banks by rejecting the Tester-Corker amendment to the Economic Development Revitalization Act. Check out the details below to see how it happened, who the major players were, and where your Senator stands.

The Issue: Debit Card "Interchange" Fees
The amendment addressed debit card "interchange" regulation. Every time a merchant accepts a debit card payment, banks charge a certain additional fee to process the fee. Large retailers and small businesses alike absorb large costs when the consumer chooses to pay with a debit card. In the past, Congress has delayed action on interchange fees by attempting to "study" the issue further. A recent Federal Reserve study was the result of such a delay. Taking place over many months and receiving thousands of comments in an open process, the Federal Reserve recommended capping these debit card fees at 12%. The Tester-Corker amendment was an effort to request further study of interchange fees and delay Senate action.

Major Player 1: The Lobbyists
Commuters in Washington, DC, got a fairly unique look at this battle. As The Hill noted, this was the biggest K Street lobbying battle of the year. On DC's Metro trains, a group of banks and banking associations collectively calling themselves the "Electronic Payments Coalition" plastered as many as 7 or 8 advertisements in some Metro cars saying "Washington is helping giant retailers clean out your wallet" by considering regulation of debit card interchange fees. In DC's expensive market, there's something disingenuous about a coalition of banks that can afford to pay for multiple ads trying to take the side of small business and consumers. One of our contributors says that there were also some counter-ads from groups opposing the Electronic Payments Coalition.

Major Senate supporters of delaying interchange regulation
The amendment in question was sponsored by Senator Jon Tester, Democrat of Montana, and Senator Bob Corker, Republican of Tennessee. Senator Tester is a relatively moderate Democrat. Senator Corker is a conservative Republican who has nevertheless gained a reputation as someone who can work with Democrats. He is a key figure on the Senate Foreign Relations Committee and voted for the New START Treaty. He gained considerable wealth from his Tennessee construction business and tends to err on the side of less regulation and support for Wall Street.

Senator Dick Durbin
Senate Majority Whip Dick Durbin led the effort to prevent the Senate from achieving the 60 votes necessary to delay regulation by approving the Tester-Corker Amendment. Senator Durbin is a strong liberal with the second-highest leadership position in the Senate Democratic Caucus and a leading role as a member of the Gang of 5 (formerly 6) senators seeking a bipartisan solution to deficit reduction. He is known for being a good floor leader and someone who targets his floor speeches to the wider audience, distilling complex issues so that constituents can understand them. Nevertheless, as the votes below show, his leadership on this issue doesn't mean that his position was a Democratic position.

The final vote was 54 for, 45 against, 1 not voting. Because the 60 vote threshold wasn't achieved the Tester-Corker Amendment failed. The majority of Republicans (34) voted for Tester-Corker, and the majority of Democrats (33) voted with Durbin. Nevertheless, many Democrats and Republicans alike voted against the majority of their party. Below are the Republicans who voted with Durbin and the Democrats who voted with Tester-Corker. If your Senator is not here, you can assume he/she voted with the majority of their party (except for Senator Lieberman, who didn't vote at all).

Republican Senators Voting Against the Tester-Corker Amendment To Delay Interchange Regulation (12)
John Barrasso (WY), Scott Brown (MA), Richard Burr (NC), Saxby Chambliss (GA), Susan Collins (ME), Mike Enzi (WY), Lindsey Graham (SC), Chuck Grassley (IA), Johnny Isakson (GA), Richard Lugar (IN), Olympia Snowe (ME), David Vitter (LA)

Democratic Senators Voting For Tester-Corker (19)
Dan Akaka (HI), Max Baucus (MT), Mark Begich (AK), Michael Bennet (CO), Tom Carper (DE), Chris Coons (DE), Kirsten Gillibrand (NY), Kay Hagan (NC), Tim Johnson (SD), Joe Manchin (WV), Claire McCaskill (MO), Barbara Mikulski (MD), Ben Nelson (NE), Bill Nelson (FL), Chuck Schumer (NY), Debbie Stabenow (MI), Jon Tester (MT), Mark Warner (VA), Jim Webb (VA)