Community Organizations Express Concern about Fed Debit Card Rule

“On behalf of the 3.2 million members of the National Education Association, we urge you to enact legislation that allows for a more thorough examination of the potential unintended consequences of the Durbin amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act.  We believe that this amendment, while well-intentioned, could have a significant negative impact on the cost of mainstream banking services to middle and lower-income consumers, including teachers and education support professionals, because of the benefits currently made possible by debit cards.”

"We believe this rule should be thoroughly and expeditiously reviewed prior to implementation, allowing a full and appropriate impact study to be performed to ensure that it will not raise fees or otherwise harm at-risk communities, including communities of color."

"NAN is not concerned with protecting the profits of big banks or big box retailers in this fight over transaction fees when using debit cards. However, NAN is concerned that consumers, in a growing number of at-risk neighborhoods, cannot afford to pay any more money to either side — people are 'tapped' out."

"While we applaud Senator Durbin for taking steps intended to help protect merchants and to alleviate some of the costs they bear, there is no convincing evidence that employing federal pricing controls on interchange fees for debit swipes will meaningfully benefit merchants and their customers."

"The Durbin Amendment, which provided a carve out for smaller institutions in an attempt to help them keep revenue streams intact, simply will not work as it pits small, community institutions against the big box retailers — a fight our local institutions are sure to lose."

"We would be concerned with a rule that would inadvertently reduce access to debit cards and other basic banking services to low — and moderate — income borrowers. It is therefore imperative to subject this proposal to careful study and analysis."

"If the Federal Reserve shares our uncertainty about the potential economic behavior of major actors and potential consequences for unbanked Americans resulting from this rule, we would urge the Federal Reserve to outline a series of remedies that would ensure continued and enhanced access to safe, affordable basic banking products and services."

“It is our hope that Congress will reconsider this rule and the implications it could have on rural America. In an economy still struggling to recover from a financial downturn, creating greater hardships for America’s heartland will only hinder our country’s recovery from this financial crisis.”

“While we are concerned about the specific impact of this regulation, more broadly, this is a prime example of government over-reach. There is simply no reason that a cadre of Washington D.C. officials should dictate how much one set of businesses should charge another for a service. It is time to return government to its proper limits by preventing this kind of meddling in what should be considered the private sector.”