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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 The Durbin amendment puts red tape and price controls on these purchases and must be immediately and completely repealed to restore the free market.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
Shortly after President Trump was elected, congressional leaders set an aggressive schedule for addressing healthcare, taxes, and financial services this calendar year. With the prolonged fight over healthcare continuing, and now with United States involvement in Syria looming large, the calendar will likely need to be adjusted. The original goal was to get tax reform done by August recess, but now the administration is openly questioning whether that’s possible. One thing Congress shouldn’t do, however, is let wholesale reform of Dodd-Frank fall by the wayside. The financial services industry desperately needs reform. Dodd-Frank, passed in the wake of the financial crisis, has strangled economic growth. The bill was needlessly complicated and added layers of regulation targeting things that were entirely unrelated to the causes of the financial crisis. It became a grab bag for left-wing grievances against the financial services industry. A perfect example is the so-called “Durbin amendment,” named … Continue reading
In the last few years it is has become commonplace to see signs posted on cash registers in mom and pop stores saying, “five dollar minimum purchase for credit card.” It seems normal, and most of the time you just buy a chocolate muffin with your coffee to make up for the difference. But what if I told you that before 2010, it was wholly uncommon for stores to have these notices scrawled in pen on the side of their registers? If anything, it was something that no one would have ever considered to do – especially since small businesses value the returning customer, loyal to their wares and products, over any minute expense. Continue Reading
For years the payments industry has been at odds with big-box retail lobbyists over the Durbin amendment — an amendment to the Dodd-Frank bill by Sen. Richard Durbin (D-IL) that sets price controls on debit interchange fees. Why is this debate resurfacing again now? Because after six years, American consumers are waking up and realizing they have been cheated, that the policy is a failure. Community banks, credit unions, and other financial institutions recognized right away that the Durbin amendment’s price controls would pose a serious problem. But a few members of Congress have taken a bit longer to come around, in part because the technical description of the law makes a good story for merchants. Big-box retailers also have a track record of leaving out key data and speaking for community banks and credit unions — those actually impacted by this harmful regulation. Continue Reading