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Durbin Amendment on Debit Interchange
An amendment to S. 3217, the “Durbin Amendment,” was put into law in July 2010 as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act. It arbitrarily limits the cost that merchants pay to accept debit cards, and eliminates important rules that are in place expressly to protect consumers. The regulatory power to enforce this amendment is now in the hands of the Federal Reserve.
Read about the Federal Reserve’s rule on this issue.
Added in the Dark of Night
The Durbin Amendment had no hearings, studies, or careful examination of the unintended consequences for consumers.
- Debit interchange had nothing to do with the financial crisis, and this provision had no place in the Dodd-Frank Act.
- There was no consideration in any Congressional committee.
- There was no vote in the House of Representatives.
- There was only scant discussion in the Senate – and that was by the lone sponsor of the amendment.
- There was no analysis presented to Congress of the impact on consumers, the banking system, or the overall economy.
- There was no analysis of whether the $10 billion asset "safe harbor" would avoid harm to community banks and credit unions.