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 before the Durbin Amendment’s enactment.”
Retailers promised to pass this sum along to their customers in the form of lower prices but customers are still waiting to see a difference.
Zywicki’s insightful testimony supports EPC’s mission of promoting consumer convenience, innovation, and competition. As he states, “the presence of the Durbin Amendment presents one of the leading obstacles to the development of a low-cost, highly-functional mobile banking platform that could provide not only essential financial services for millions of low- income and young consumers, but also their first step toward full financial inclusion.”
Today’s hearing highlighted yet another troubling issue with the Durbin Amendment and EPC is glad to see lawmakers taking a fresh look at this harmful provision.
Read Professor Zywicki’s full statement.
About the Electronic Payments Coalition
The Electronic Payments Coalition (EPC) is a coalition of payments industry stakeholders, such as credit unions, community banks, trade associations, payment card networks and banks that speaks on behalf of the payments industry to protect the value, innovation, convenience, security and competition that exists in the modern electronic payments system. The EPC educates policymakers, consumers and the media on the system’s role in economic growth and the importance of consumer choice, security, innovation and stability for the continued growth of global commerce.