“The Federal Reserve’s announcement that they cannot meet the deadline on interchange fees confirms my view that this is the only part of the financial reform bill that needs to be amended," he said. "For this reason, I support legislative action to postpone the deadline so that we can revisit it.”
Frank had previously indicated he would be willing to consider reworking the provision, dubbed the Durbin amendment, which imposes stringent limits on the amount of fees banks can charge retailers processing debit cards.
But Sen. Dick Durbin (D-Ill.), the primary backer of the amendment, said Tuesday it would be a “serious mistake” to delay implementation of his amendment and that he hoped Congress wouldn’t go down that path.
He added that he was looking forward to seeing the rules the Fed is now scheduled to finalize no later than July 21.
“I think that they can strike a balance and make certain these banks receive what’s reasonable and proportional, but not the overcharge that they currently have,” Durbin said following a hearing.
The amendment has been the subject of a months-long, intense lobbying battle, pitting banks against retailers as they fight over billions in potential revenue.
Under proposed rules unveiled by the Fed in December, banks would be limited to charging 7 to 12 cents per transaction, down significantly from the current 44-cent average.
Legislation has been introduced in both the House and Senate that would delay the implementation of the rules for at least two years, allowing for further study on the matter.
In the Senate, a bill sponsored by Sen. Jon Tester (D-Mont.) has been introduced as an amendment to a pending small-business bill. No vote is yet scheduled on it.
This post updated at 11:41 am.