Behind the multimillion-dollar battle over the fees retailers pay every time customers swipe a debit card is a fight for the loyalties of interest groups whose members straddle the issue.

Banks that charge the fees are pitted against retailers not only in wooing lawmakers and regulators but also for the support of organizations — such as unions and minority groups — that have been reluctant to take a public stand on how much banks and credit card companies should be allowed to charge for every debit transaction.

A provision capping the fees was included in last year’s financial regulatory overhaul legislation, and the new rules, expected to take effect in July, will cost banks billions of dollars — unless they can persuade Congress or the administration to put the brakes on the plan.

Banks have mounted a campaign to win a delay, retailers have mounted an opposing effort and both sides have sent their lobbyists to lobby other lobbyists.

The new rule was added to the reform bill as an amendment by Senate Majority Whip Dick Durbin (D-Ill.) last summer after an equally heated lobbying battle. Now, Sen. Jon Tester (D-Mont.) has proposed legislation that would delay its implementation by two years.

The proposed rule issued by the Federal Reserve in December would cap swipe fees at 12 cents per transaction, about
70 percent less than the average fee on such transactions in 2009.

Retailers argue that they are forced to artificially inflate their prices to cover transaction rates set by Visa and MasterCard, the two companies that dominate the debit card market.

They say the fee is particularly detrimental to independent operations and convenience store chains that do low-dollar business because the charge bears almost no relation to the cost of the transaction.

But this is hardly a war between big banks and mom-and-pop coffee shops. A coalition of large retailers, including Wal-Mart Stores Inc., Target Corp. and Best Buy Co. Inc., have aligned themselves against Tester’s legislation and a similar bill in the House, sponsored by Rep. Shelley Moore Capito (R-W.Va.).

Meanwhile, minority organizations, business advocacy groups and unions have become prime targets for both camps because they represent conflicted, or even disinterested, populations. The NAACP, the AFL-CIO and consumer advocacy groups have been courted by lobbyists on both sides of the debate, according to sources involved in the meetings.

“It’s like World War I out there and anyone in the middle gets shelled, and because our position does not fall neatly into either category, there have been attempts on both sides to win our support,” said Travis Plunkett, the top lobbyist at the Consumer Federation of America, an organization that represents consumer-oriented nonprofits. “That’s what various lobbying groups do: They try to woo and they do it to public interest groups.”

Plunkett has discussed the issue with lobbyists on both sides of the fight. A letter he sent to Senators earlier this year requesting an increase in the proposed fee limit, but not recommending a delay in its implementation, was trumpeted by banks as an example of a new group joining their team.

NAACP and TechNet, a group representing major technology firms, in a series of letters this spring had to clarify their positions because various parties were citing their public statements as evidence of support.

In meetings with the NAACP and other minority groups, financial services industry representatives argue that low-income consumers will bear the brunt of the decrease in swipe fees because it could force banks to charge higher fees for other services, such as opening accounts and using debit cards. The NAACP has requested a review of the amendment’s effect on low-income populations, but it opposes a delay in the rule’s implementation.

Nancy Zirkin, the head lobbyist at the Leadership Conference on Civil and Human Rights, dismissed the banks’ argument as “ludicrous” and said it is an example of how minority organizations often get pulled into a fight in which they have little stake.

“In any lobbying effort, any legislative effort, you try to engage the unusual suspects,” she said. The NAACP and the National Education Association, the
3.2 million-member teachers’ union that endorsed the Tester legislation in March, serve on the conference’s board of directors.

On the other side of the debate, the Hispanic Strategy Group, a consulting firm that specializes in reaching out to a Latino audience, is circulating a letter to other minority groups opposing the Tester bill, according to emails obtained by Roll Call.

The firm claims to be working in partnership with the Merchants Payments Coalition, one of the largest groups representing retail, but a lobbyist for the coalition said he was not aware of the collaboration.

Bank representatives have also requested meetings with union officials.

“The unions have certainly been approached by the banks,” a source familiar with bank efforts told Roll Call. “They need Democratic support. There’s people all over town trying to yank every favor they can find.”

Both sides are also trying to win support from the National Federation of Independent Business, but thus far the organization has stayed out of the fray.

“The most notable group that has been courted but hasn’t done anything is NFIB,” said a lobbyist familiar with meetings between the NFIB and representatives of the banks and retailers. “Each side wants them and neither side can claim them.”

The largest business lobby in D.C. has also remained staunchly neutral: The U.S. Chamber of Commerce, which represents powerful banks such as JPMorgan Chase & Co. as well as major retailers, has taken no position on the fees.