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In the Hans Christian Andersen tale the Emperor Has No Clothes, a king is convinced by two scam artists that they can weave him a suit that can only be seen by the best and brightest in the land. As the Emperor parades around naked, his subjects are fearful to comment because they don’t want to be viewed as stupid. It finally takes a child to blurt out what is clear to everyone – that indeed the emperor was wearing nothing at all. This story is reminiscent of the fairy tale retailers have been telling for the past seven years – trying to convince Congress that price controls on debit card interchange fees are beneficial to consumers and small businesses. Continue Reading
WASHINGTON—(June 8, 2017)—The Electronic Payments Coalition (EPC) applauds House Financial Services Committee (HFSC) Chairman Jeb Hensarling and Reps. Blaine Luetkemeyer (R-MO) and Ted Budd (R-NC) for speaking out today on the House floor in defense of the consumers, small businesses, credit unions, and community banks harmed by the Durbin amendment. Although repeal of the Durbin amendment was removed from the CHOICE Act, these leaders stressed the importance of ending this failed policy. “As Chairman Hensarling, Reps. Luetkemeyer and Budd stated, price controls have no place in government policy, as they go against free market principles and always end up hurting consumers,” said Molly Wilkinson, executive director of EPC. “For six years too long, the Durbin price controls have allowed big box retailers to pocket $42 billion at the expense of consumers, small businesses, community banks, and credit unions. We appreciate their leadership in the fight to end this merchant markup … Continue reading
In a disappointing turn of events, Congress has decided to strip out crucial language from the Financial CHOICE Act that would have righted a serious wrong done to consumers over the last seven years. Last month, the House Financial Services Committee voted to include language in the bill to repeal the disastrous Durbin amendment, and do away with price controls on debit interchange fees that have provided retailers $42 billion in profit since 2011. These same retailers promised to lower prices for their customers with the additional revenue, but those savings never materialized and in many cases prices have been increased. Tacked on to the enormous Dodd-Frank bill in the 11th hour, the Durbin amendment was full of empty promises that were never fulfilled. Continue Reading
On April 28, ABA, CBA, CUNA, EPC, FSR, ICBA, and NAFCU sent a letter to HFSC Chairman Hensarling and Ranking Member Waters urging repeal of the Durbin Amendment as part of CHOICE Act.
This week, big-box retailers and their lobbyists will be on Capitol Hill with an unenviable chore: to defend a policy that hurts consumers, harms small retailers and makes no economic sense. Their goal is to protect the Durbin amendment, a bad policy passed through an even worse legislative process. More and more members of Congress now recognize that this change was a mistake that has resulted only in a massive windfall for large retailers. Continue Reading
Debit and credit cards make it far more convenient to buy the things you need or love. Debit interchange convenience fees – the small charges retailers pay for the flexibility of accepting cards – make these transactions possible, secure, and reliable. The Durbin amendment changed the way this once reasonable cost of business is calculated. Prices at big-box retailers should have been lowered for customers thanks to this change, it’s what retailers promised after all, but that hasn’t happened. Big-box retailers have now pocketed $42 billion that was meant to go to you. This is what we call the Merchant Markup. Meanwhile, community banks, credit unions, and consumers are carrying the burden and being forced to eliminate debit card rewards and free checking accounts. The Durbin amendment puts red tape and price controls on these purchases and must be immediately and completely repealed to restore the free market. Check out our video here.
Over the last few months, merchant lobbying groups have stormed Capitol Hill requesting two things: that lawmakers sink federal tax reform by opposing border adjustability and that they support federal price controls on debit interchange fees. On the latter, at least, Congress isn’t listening. The House Financial Services Committee has just released the discussion draft text of the Financial CHOICE Act, which would repeal those price controls. Chairman Jeb Hensarling (R-Texas) deserves credit for his leadership on this issue. Repealing the price controls might just be what small retailers really want. Continue Reading