Consequences of the Durbin Amendment

It has been three years since the Senate’s passage of the Durbin amendment as an attachment to the Dodd-Frank act of 2010. Since that time, consumers have been adversely impacted by the legislation. In the past three years, over ten separate studies have illustrated these unintended consequences.

Consumers Pay More For Banking. Merchants not passing along Savings.

In an effort to make up for lost revenue due to the Durbin amendment, banks have had to eliminate free checking accounts and debit card reward programs for customers.  According to several surveys, only 39 percent of banks offer a checking account with no minimum balance requirement and no monthly checking fee, down from 45 percent in 2011. Additionally, consumers have yet to see any savings resulting from the $8 billion a year windfall seen by merchants as a result of the Durbin amendment. All of the below studies below illustrate the consequences consumers have felt as a result of the Durbin amendment.

• Bankrate: 2013 Credit Union Checking Survey
• Bankrate: Checking Fees Rise to Record Highs in 2012
• Pew Charitable Trusts: An Update on the Safety and Transparency of Checking Accounts
• Moody’s Investor Service: New Debit Rules Hurt Banks and Reshape the Payment Processor Market
• Ipsos Survey: Only 7% Think Most Retailers Are Passing Along Savings from Lower Debit Card Fees to Consumers
• EPC: Where’s the Debit Discount?

    

EPC's Trish Wexler