After Swipe-Fee Limits Fight, Lobbyist Warns of Consequences

The retail industry has been on a hot streak in the new Congress, most recently manifested by its success in killing a House Republican plan to repeal existing limits on debit card swipe fees.

But opponents of the limits that would have been repealed under the plan to replace financial rules from the 2010 Dodd-Frank Act told Morning Consult that victory on swipe fees could have future political consequences for the retail industry. Retail organizations ran digital and radio advertisements challenging numerous on-the-fence Republicans to oppose repealing the swipe fees through H.R. 10, the Financial CHOICE Act, or outright attacking them for supporting repeal.

The advertisements escalated to the point where Rep. Ted Budd, a conservative Republican from North Carolina, was targeted by a radio advertisement financed by the National Retail Federation calling him a “pawn for the banks” because of his stance in favor of repeal.

Two banking industry-friendly sources said that the ad against the first-term lawmaker is a political offense that the retail industry will ultimately regret, since Budd — a gun-store owner from outside Winston-Salem — comes from one of the more flippable GOP districts in North Carolina. A House GOP aide said he expects “huge fallout” from the decision to target Budd because he might be a vulnerable member when Republicans attempt to defend the House next year.

After winning a contested GOP primary fight in 2016, Budd won the general election with 56 percent of the vote. President Donald Trump captured the district by a vote of 53-44 points.

Sam Geduldig, a lobbyist representing the Electronic Payments Coalition in the swipe-fee fight, said the retail industry’s willingness to target Budd could make them as anathema to Republican lawmakers as groups that support Democratic causes like Planned Parenthood.

“They’ve created an enemy among Republicans that care about their majority, [and] care about being on a team,” Geduldig, a partner at the K Street firm CGCN, said in a Friday interview. “Retailers ran ads against Ted Budd, and members that are offended by that won’t forget this.”

To retailers, however, actions like the ad against Budd were necessary measures because the financial services industry put them on the defensive. Austen Jensen, vice president for government affairs at the Retail Industry Leaders Association, said in an interview Friday that he therefore doesn’t think lawmakers will try to punish his industry because they recognize that banks initiated the controversy by pushing to include repeal language in the CHOICE Act.

“Everyone knows that retail did not initiate this fight,” he added.

David French, NRF’s senior vice president for government relations, also noted that numerous Republicans supported the retail industry’s stance.

“I just spent most of the past day-and-a-half writing thank you notes to some of the dozens of Republican members who stood with merchants,” French said in a Friday interview.

Morning Consult