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The political viewer’s guide to Washington’s credit card wars

One of Washington’s fiercest lobbying fights might reach a breaking point this winter as retailers and banks take their credit card wars to the hallways of Congress. And no one quite knows which side lawmakers will pick.

The two sectors are at loggerheads over the Credit Card Competition Act, a package backed by the merchant and retail lobby that takes aim at credit card fees. Banks aren’t pleased. Card fees are among their most lucrative sources of profit.

One bit of good news for the banking sector – the airline industry and several of its unions have also come out hard against credit card reform, partly due to concerns about the bill’s potential impact on reward programs.

But backers of the credit card bill hope the Senate can slide it into its already jam-packed end-of-year schedule that includes potential votes on a supplemental national security package and the NDAA.

“I’m as motivated as ever. I think to some extent, our strategy depends on what bills are put on the floor here,” said Sen. Roger Marshall (R-Kan.), the lead Republican cosponsor.

Marshall suggested the SAFER Banking Act as another potential avenue. Senate Majority Leader Chuck Schumer has promised to put the cannabis reform bill on the floor, but that likely won’t happen until next year at the earliest.

“We thought the SAFE Banking Act was a good vehicle, and it just looks like we’re getting less and less work done around here. So our strategy depends on what goes on the floor,” Marshall said.

But the lead Democrat on the bill, Senate Majority Whip Dick Durbin, had a less rosy outlook. Durbin told us the credit card proposal riding on any must-pass year-end deals was “a long shot.”

“We have a limited agenda and an even more limited amount of time,” Durbin said.

Even with dim prospects for passage right now, the banking and retail sectors are gearing up for a legislative brawl with billions of dollars on the line.

Here are the key groups to watch as the credit card war plays out.

The merchants: Doug Kantor, general counsel at the National Association of Convenience Stores; Stephanie Martz, chief administrative officer and general counsel at the National Retail Federation and Jennifer Hatcher, chief public policy officer and senior vice president of government and public affairs at the Food Marketing Institute.

Kantor is one of Washington’s longest-serving fighters in the credit card wars, pushing for card reforms and lobbying congressional staff since before Dodd-Frank. Martz leads swipe fee strategy for the country’s single largest merchant lobby organization, while Hatcher represents food and grocery retailers, specifically.

Merchant supporters: Sens. Durbin, Marshall and Peter Welch (D-Vt.).

Durbin is one of the retail sector’s most stalwart allies in this fight. As chair of the Senate Judiciary Committee, he’s focused on the antitrust implications behind Mastercard-Visa’s market dominance.

Marshall is a recent recruit who has energized merchant supporters with a hard-charging style. The Kansas Republican has already threatened to hold up multiple Senate bills unless there’s a commitment from leadership to vote on the CCCA. Welch, meanwhile, has been a big supporter of this cause since his days in the House.

The bankers: Richard Hunt, executive chair of the Electronic Payments Coalition; James Ballentine, founder of the lobbying firm Ballentine Strategies and former head of congressional relations for the American Bankers Association; and Pace Bradshaw, senior vice president and head of U.S. government engagement at Visa.

Hunt has an operator’s reputation in financial circles. Before joining the EPC, he helped transform the Consumer Bankers Association from a sleepy trade group into a formidable force in the retail banking space.

Ballentine led government affairs for the nation’s largest bank lobby for more than two decades and now runs his own practice. Bradshaw, as Visa’s top lobbyist, has played a prominent role in crafting the credit card lobby’s strategy.

Banking backers: Rep. Patrick McHenry (R-N.C.), Rep. Blaine Luetkemeyer (R-Mo.) and Sen. Jon Tester (D-Mont.).

Tester has been an ally of banks in this fight dating back to his House days. That’s partly because of his strong relationships with community banks. McHenry and Luetkemeyer are staunchly opposed to the reform. McHenry is chair of the House Financial Services Committee, and Luetkemeyer is a senior lawmaker on the panel and a former banker himself.

The X factor: A vote on the Credit Card Competition Act would force lawmakers to pick a side between two of Washington’s most powerful interests, with hundreds of billions of dollars at stake.

But there’s one problem: Congress hasn’t voted on this issue since the last-minute inclusion of an amendment capping interchange fees for debit card transactions during the 2010 Dodd-Frank financial reform negotiations. That leaves key groups in the dark about where many lawmakers stand.

“There is a ton of uncertainty, whether it’s from the retailers or from the credit card companies and banks, as to where everybody is on this,” one lobbyist told us.

— Brendan Pedersen

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Editorial photos provided by Getty Images. Political ads courtesy of AdImpact.