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March typically is an important month on Capitol Hill. Varying constituent groups from all over the country fly in to Washington for meetings with senators, representatives and their staff. Committee agendas are prioritized. Bill introductions increase dramatically. Work on the next fiscal year’s budget begins in earnest.
The prospects of a government shutdown loom over this current Congress. The question is how much energy and time will Members have to tackle important, non-budgetary issues such as the Durbin interchange amendment. We should have a clearer answer in the coming weeks.
The House Financial Institutions and Consumer Credit Subcommittee will conduct a hearing Wednesday on the effects of the Dodd-Frank Act on small financial institutions and small business. As you may recall, this Subcommittee dedicated an entire hearing on the Federal Reserve’s proposed rule on the Durbin interchange amendment on February 17. Hearing details are scant at this writing, but one must assume more time will be devoted to the interchange issue.
On the Senate side, Sens. Kay Hagan (NC) and Michael Bennet (CO) wrote Federal Reserve Chairman Ben Bernanke to urge him “…to create a meaningful and workable small issuer exemption from the interchange requirements.” They cited Bernanke’s own testimony before the Senate Banking Committee recently that the small issuer exemption may not be workable in the marketplace. A consensus is emerging among all Durbin interchange amendment players (with the exception of the merchants) that, at a minimum, the small issuer exemption needs fixing.
The good news is momentum has not waned on Capitol Hill to understand the impact of the Fed’s proposed rule on interchange. Let us hope to avoid the bad news of a possible government shutdown short-circuiting this important policy work.
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