By Alexander Bolton - 04/20/11 10:14 AM EDT
Sen. Jon Tester (D-Mont.) has reaped a windfall in contributions from banks and lobbyists since introducing legislation to delay new regulations on debit-card swipe fees.
Tester collected nearly $60,000 in contributions from credit card companies and other opponents of the proposed caps on swipe fees in the 17 days following the introduction of his bill, public fundraising records show.
His Republican challenger, Rep. Denny Rehberg (Mont.), raised $580,000 in the first quarter and transferred nearly a half million dollars from his House campaign account to his Senate fund.
The biggest surge of contributions to Tester’s campaign came from employees of TCF Financial Corp., the lead plaintiff in a federal lawsuit to block what has become known as the Durbin rule.
Named after an amendment Sen. Dick Durbin (D-Ill.) attached to Wall Street reform legislation in 2010, the rule would cap the fees that banks charge retailers for debit-card transactions at 12 cents — about a fourth of the 44 cents now charged for an average transaction.
TCF Financial collected more than $110 million in card revenue last year, most of it from interchange fees, according to a report on the company’s 10-K filing by TheStreet.com.
TCF Financial sued the Federal Reserve in October to block the rules that would be implemented because of Durbin’s amendment.
Six days after Tester introduced his legislation, which would delay implementation of the regulations by between 12 months and 18 months, executives at TCF Financial gave his campaign nearly $16,000 in contributions, including $9,000 from the company’s political action committee.
That same day, Tester received $500 contributions from two executives at Wells Fargo; $2,500 from Richard Davis, president and CEO of U.S. Bancorp, as well as $1,000 from the company’s political action committee; $1,000 from Bank of America’s PAC; and $1,500 from Discover Financial Services’ PAC.
A few days later, the American Bankers Association delivered a $5,000 contribution.
All of these companies have a stake in the fight over debit-card swipe fees. Earlier this year, Wells Fargo CEO John Stumpf described the proposed regulation of swipe fees as “government price controls” that would force banks to pass on higher costs to customers.
Davis, of U.S. Bancorp, told analysts in July that his company would contemplate reducing debit awards and charging debit-card fees to offset what he described as the impact of the Durbin amendment.
Regions Financial Corp. gave $1,000 to Tester through its political action fund on the day he introduced his debit bill. The company, which collected nearly $350 million in debit-card fees last year, estimates it would lose about a quarter of that income if the Fed caps fees at 12 cents per transaction.
Preston Elliot, Tester’s campaign manager, defended the lawmaker’s record on the Banking Committee.
“Montana already has a Wall Street representative and his name is Dennis Rehberg,” said Elliot. “Jon’s votes against bailouts, his reform of Wall Street and his crackdown on the credit card industry sent a clear signal to big banks that he only does what’s best for Montana.
“Fixing the interchange rule is best for Montana because without a fix, Montana consumers and small businesses will be hurt,” said Elliot.
Tester has emphasized his role in helping to pass credit card reform legislation in the last Congress and his vote against the Wall Street bailout in 2008.
A Tester aide noted that the senator also received money from Walgreens, which opposes his proposal to delay regulations of swipe fees.
The Montana Democrat has also collected campaign contributions from lobbyists that represent banking interests.
Since mid-March, SNR Denton, which represents the Independent Community Bankers of America group, gave $4,000 in contributions from its political action fund and from individual employees. Executives with Ogilvy Government Relations, which represents Visa, gave $4,000 between March 15 and March 31.
Tester’s legislation, which he filed as an amendment to small-business legislation pending on the Senate floor, has sparked one of the biggest lobbying battles of 2011. It has pitted banks and credit unions against retailers including Wal-Mart and Home Depot.
“It’s like a Major League Baseball strike: the millionaires versus the billionaires,” said a Senate Democratic aide.
Tester received substantial contributions from banking and credit card interests before he introduced his bill. The National Association of Federal Credit Unions gave his campaign $1,500 in mid-February and $6,000 so far this election cycle through its PAC. Visa’s political fund has contributed $5,000 to date in the election cycle.
Independent Community Bankers has donated $11,050 in PAC contributions to Tester’s campaign so far this election cycle, according to the candidate’s fundraising report.