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NTU President Pete Sepp issued the following statement on the CHOICE Act: “Thanks to committee passage of the Financial CHOICE Act, the full House of Representatives now has an opportunity to advance genuine reforms that will protect taxpayers, empower consumers, boost small businesses, and free our economy from the disastrous Dodd-Frank law. Continue Reading
The merchant lobby and regulators seeking to reduce card-acceptance costs framed the terms of the interchange debate, focusing narrowly on merchants’ costs. They’ve made slow but seemingly inexorable headway in courts, legislatures, and regulatory agencies imposing public-utility models rather than markets to set interchange. There are signs, however, that may be starting to change. Continue Reading
North Carolina credit unions applaud and support U.S. Rep. Ted Budd’s (R-N.C. 13) effort to repeal the Durbin Amendment. During an April 26 House Financial Services Committee hearing, Davie County’s Budd stood up for North Carolina consumers, advocating repeal of the Durbin Amendment enacted in 2010 as part of the Dodd-Frank Act. The price-control measure addressed allocation of interchange fees that fund the credit- and debit-card payment system. Continue Reading
Congress will soon consider the Financial CHOICE Act (FCA), the comprehensive bill aimed at correcting the mistakes of the Dodd-Frank Act and earlier financial laws such as Sarbanes-Oxley. Among those mistakes was the “Durbin Amendment,” which imposed a price cap on the fees banks can charge merchants when customers use the bank’s debit cards to buy goods or services from the merchant. Despite literally thousands of years of evidence that price caps don’t work, big merchants and their allies are lobbying hard to get repeal of the Durbin Amendment out of the FCA. Two important new pieces of research underline why it should stay in. The first is an update of a 2014 paper for the International Center for Law and Economics by Todd Zywicki, Geoffrey Manne, and Julian Morris that demolishes the claim that the Durbin Amendment would be good for the consumer as their costs would be lowered. … Continue reading
This week, the House Financial Services Committee marked up and passed landmark legislation, H.R. 10, the CHOICE Act. If it can get signed into law, this bill can help small businesses, Americans who are struggling economically, and improve congressional oversight. Not bad for government work. Rep. Jeb Hensarling (R-Texas ), chairman of the committee, introduced the bill which would right many of the wrongs committed by the Dodd-Frank Act. That law from the left has acted like a restrictor plate on the American economy. Two components of the Dodd-Frank Act, the Durbin amendment, and the establishment of the Consumer Finance Protection Board (CFPB), have been onerous obstacles to economic growth in the United States. Continue Reading
Consider, for a second, the debit card. If yours is anything like mine, it’s a battered, unimpressive piece of plastic with some numbers on the front, and a signature on the back that’s nearly worn off. I suspect most of us think about it when we lose it, and the hassle involved with canceling it, eliminating fraudulent charges, and getting a new one. But a debit card is more than that. By itself it’s a piece of plastic, but if it’s backed by a multi-billion dollar payment network in every store in the developed world, it’s the equivalent of carrying around your entire bank account. It’s access to whatever purchase, in cash, that you want at any time. No need to worry about going into debt with a credit card, carrying cash, going to an ATM, remembering the checkbook, etc. Continue Reading
In the United States, we’ve long had a free market system, but that system is not what it once was. Total government spending–state, federal, and local–has grown in real terms by more than 400 percent since 1965. Government spending is now one-third of the economy. As the private economy retreats, the importance of a new marketplace grows: the political marketplace. Products and services are no longer judged according to their usefulness to the economy at large–they’re judged according to whether or not they are politically useful or connected. The political marketplace is the marketplace of crony capitalism. Its supply and demand are lobbying expenditures and the resulting federal program or carve out. Its actors are not firms, but the political class and the politicians they influence. This won’t be anything new to people who have been following Washington over the years, but I do want to talk about a textbook … Continue reading
Rep. Budd: The Price Control On Debit Card Fees Hurts Consumers. This Week, Congress Is Fighting To Fix It.
Price controls have never worked. The 17th century Puritans tried them in the Massachusetts Bay Colony only to see them fail. They failed when the French tried them during their revolution in the 1790s. They failed when Richard Nixon tried them in the 1970s. And they failed when Jimmy Carter continued them. But government, like history, repeats itself, and in 2010, in the secrecy of the Dodd-Frank Conference Committee, we got the latest federal experiment in government price controls: the Durbin Amendment, a cap on the fees that banks charge merchants whenever a consumer uses a PIN number with a debit card. Continue Reading
In its letter, FSR thanked the House Financial Services Committee for its continued work to advance a more effective and resilient financial services sector that protects consumers and taxpayers, while also promoting economic growth. H.R. 10, the Financial CHOICE Act, is an important first step that will drive the process to improve the regulatory system and help promote economic growth. FSR supports the many provisions in this legislation that will help improve the regulatory system. We also look forward to working with the Committee and policymakers to refine aspects of this bill as it moves through Congress. Continue Reading View the full letter here.
Dear Chairman Hensarling: On behalf of the Consumer Bankers Association (CBA), I write to express our appreciation for your leadership in crafting H.R. 10, the Financial CHOICE Act. H.R. 10 marks the first major step in the legislative process for the 115th Congress in bringing about much needed reforms to the Dodd-Frank Act and the financial regulatory environment. CBA is the voice of the retail banking industry whose products and services provide access to credit for consumers and small businesses. Our members operate in all 50 states, serve more than 150 million Americans, and collectively hold two-thirds of the country’s total depository assets. Continue Reading; full text below.