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SETTING THE RECORD STRAIGHT: New Analysis Demonstrates the Durbin Amendment Has Not Led to Consumer Savings or Employment Gains, Contrary to Retailer Claims
The Electronic Payments Coalition (EPC) released a new analysis today that directly dispels inaccurate claims in a report frequently cited by merchant and retailer groups on the effects of the Durbin Amendment. Retailer claims that the Durbin Amendment has benefited consumers and supported employment gains are based on a flawed study that relies on faulty assumptions. Independent data from the Federal Reserve verifies that merchants are the sole beneficiaries of interchange price caps, at the expense of both consumers and the financial industry. “Merchant groups have been touting a study they funded in 2013 by economist Robert J. Shapiro to back up their positions on interchange regulation,” said Molly Wilkinson, executive director of EPC. “The study is fundamentally flawed and presents an inaccurate picture of the true impact of the Durbin Amendment. This is a failed policy that only benefits the special interests that pushed for it—big box retailers.” The … Continue reading
The Durbin Amendment, a.k.a. “merchant markup,” allows big box retailers to pocket $8 billion dollars a year from customers’ purchases. That’s $32 billion since Congress passed this law and retail groups are looking to increase their merchant markup even more. Additionally, big box retailers are not held to any federal standards to protect their customers, yet 90% of consumers agree they should be held to similar standards as banks and financial institutions when it comes to keeping customer data secure and private. The Data Security Act of 2015 would help protect consumers but retailers are fighting the bill to increase their bottom line. It’s time to put consumers first.
On May 10, 2016, EPC sent a letter to House leadership explaining why H.R. 2205 is needed to better protect consumer information. This letter is a follow-up to an earlier one from October.
A statement from Molly Wilkinson, executive director of the Electronic Payments Coalition (EPC) in support of the Data Security Act of 2015, H.R. 2205: Despite recent claims from representatives of the retail industry, security measures to protect sensitive customer information are needed across industries that handle consumers’ personal and financial information. Retailers are not currently held to any Federal security standards, yet a recent Morning Consult poll found 90 percent of consumers agree stores and retailers should be held to similar standards as banks and financial institutions to keep data secure and private. Banks and financial institutions go above and beyond the requirements of the Gramm-Leach-Bliley Act (GLBA) to safeguard their customers’ information and the same effort should be required of others that handle sensitive customer data, such as credit and debit cards. There are numerous safeguards implemented by financial institutions that retailers currently do not abide by, such as: … Continue reading
In October 2015, Electronic Payments Coalition and some of its members sent a letter to the Hill in support of H.R. 2205, the Data Security Act. Members who signed include Credit Union National Association (CUNA), Consumer Bankers Association (CBA), Financial Services Roundtable (FSR), Independent Community Bankers of America (ICBA), National Association of Federal Credit Unions (NAFCU) and American Bankers Association (ABA).
A study by the Federal Reserve Bank of Richmond found that the Durbin Amendment is not working as Congress intended and has led to several unintended consequences. This resource provides further information on how the Amendment has failed consumers.
A statement from Molly Wilkinson, executive director of the Electronic Payments Coalition (EPC) praising testimony from Professor Todd Zywicki at the U.S. Senate Committee on Banking, Housing, & Urban Affairs hearing today: Price controls on debit card transactions, which were enacted through the Durbin Amendment, have created a hand out for retailers that so far has reached $36 billion and continues to rise each year. Professor Zywicki’s testimony made this padding by large retailers evident by noting, “While the Durbin Amendment has saved big box retailers billions of dollars per year in interchange fees, there is no evidence to date that those cost savings have been passed on to retail consumers. In short, consumers are paying higher fees for bank accounts and receiving no rebates from retailers. Indeed, unlike big box retailers that have received multi-billion dollar windfalls, many small retailers are actually paying higher merchant discount rates than … Continue reading