Dodd to address the ETA

Former Sen. Christopher Dodd, D.-Conn, who served in the Senate for more than three decades, will speak during the Electronic Transactions Association Annual Meeting & Expo coming up May 10 through 12, 2011, at the San Diego Convention Center in San Diego. Dodd chaired the United States Senate Committee on Banking, Housing and Urban Affairs until his retirement in January 2011.

Dodd is most notable for his role as a chief architect of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, which created the Consumer Financial Protection Bureau. He will address the ETA's general session on Wed., May 11, following the opening address. The speech will discuss the rationale behind the financial reform legislation, the prospects for modifying the law and what the payments industry can anticipate next from government regulators.

Thomas Goldsmith, ETA Director of Communications and Public Relations, said about Dodd, "Here's a guy who was in the Senate for 30 years. Probably not too many people currently in Congress could give you any better insight on what's going on and who the players are and what the feeling is on what's likely to happen. I think people will ask about the Durbin Amendment, but I don't think that's going to be the heart of this. I suspect it's going to be more about the Consumer Financial Protection Bureau and some of the other credit card rules."

Durbin Amendment in flux

Dodd's keynote address will likely coincide with the aftermath of the April 21, 2011, deadline for the Federal Reserve to determine the Durbin Amendment's final regulations, which are scheduled to take effect July 21, 2011.

"The whole debit fee issue was not Dodd's idea," Goldsmith noted. "It was Senator Durbin who amended the financial reform act to include that. Dodd, himself, has expressed at least some reservation about the Durbin Amendment," which mandates debit card interchange regulation and could cap debit card interchange at 12 cents per transaction.

Federal officials have also expressed concerns over the amendment recently. In testimony before the Senate Banking Committee on Feb. 17, 2011, Federal Reserve Chairman Ben Bernanke said the amendment's exemption of small institutions, with under $10 billion in assets, may not work. "There is some risk that the exemption will not be effective, and that is the interchange fees available to smaller institutions will be reduced to the same extent we would see it at larger banks," he said.

During the two congressional hearings held Feb. 17, both Republicans and Democrats recommended delaying the new rules to further examine potential unintended consequences. Sheila Bair, Chairman of the Federal Deposit Insurance Corp., said the new fee restrictions could actually hurt banks with no guarantee of savings to consumers and that the ramifications are "something that maybe wasn't dealt with as thoroughly as it might have been."

Whether or not the new financial reform regulations are delayed or modified, major decisions will have been made by May, when the ETA conference is in full session.

Following Dodd's address, interchange expert Todd Zywicki, GMU Foundation Professor of Law, and Editor of the Supreme Court Economic Review, will discuss The Brave New World of Government Regulation: What Do the Fed's Debit Card Rules Mean for the Future of Payments? "Todd has written extensively on interchange and is a real expert on that and the economic effects of it," Goldsmith said. "It's going to be a very government-oriented morning."

The Green Sheet Inc. is now a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals. Click here for more information.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.