Bernanke Cannot Make Durbin Deadline -- Tester Swings into Action

Last week's blog suggested little or no legislative action to delay implementation of the Durbin Amendment interchange rules until the Federal Reserve issues the final rules (on or by April 21).

Fed Chairman Ben Bernanke threw a major monkey wrench into the entire process last week by telling Congress that the Fed would miss the April 21 deadline and offered no guidance as to exactly when the final rules would be published. In his letter to Congress, Bernanke wrote that the Fed was however committed to the July 21 implementation date. He cited the high volume of comment letters (more than 11,000) and the complexity of the issues as the two main reasons the April 21 deadline could not be met.

The same day Bernanke sent Congress the letter, Sen. Jon Tester (D-MT) filed an amendment to a small business bill (S. 493) pending on the Senate Floor. The amendment is the exact text of S. 575, Sen. Tester's legislation to delay and study the Durbin Amendment. Sens. Durbin and Tester spoke on the Senate Floor last Thursday in support of their competing efforts on interchange.

Sen. Tester told CNBC that he's confident his amendment has the 60 votes necessary to overcome a threatened filibuster from Sen. Durbin. The Senate adjourned last week without completing action on S. 493 and will resume its consideration this week. If Sen. Tester cannot get a vote on his amendment to the small business bill, he will look for other legislation on which to attach it, perhaps a continuing resolution.  EFTA has written a letter (posted under Important Links- “EFTA Tells Congress It Supports a Delay in Durbin Implementation”) to Congress expressing its support for the Tester Bill.

Financial service providers were already facing a daunting 90 day timeline from the issuance of the final rules on April 21 to the July 21 implementation date. Once Chairman Bernanke announced the Fed was compressing that timeline, proponents to delay and study the Durbin Amendment gained an advantage. We will soon see if this translates into a positive vote in the Senate.

EFTA has also written a letter to Chairman Bernanke expressing our strong believe that the industry needs at least 90 and more likely 180 days from the publication of final rules in order to make and test the changes necessitated by those rules.

Bernanke Cannot Make Durbin Deadline -- Tester Swings into Action