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In February, the White House issued a set of “Core Principles” for financial services reform that requires agencies to “empower Americans to make independent financial decisions and informed choices in the marketplace.” A good place to start would be for Congress to repeal the so-called Durbin Amendment of the Dodd-Frank Act. Seven years ago, Democratic Illinois Sen. Richard Durbin rammed through an eleventh hour amendment to Dodd-Frank that imposed price controls on the permissible rate that large banks can charge for debit card interchange fees (the service fee paid by a merchant to the bank that issues the consumer’s card). Continue Reading
Ahead of the April 26 House Financial Services Committee meeting on the CHOICE Act, ABA, CBA, CUNA, EPC, FSR, ICBA, and NAFCU sent a letter to the Committee in support of Section 735 of the bill, which fully repeals the Durbin amendment.
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 The Durbin amendment puts red tape and price controls on these purchases and must be immediately and completely repealed to restore the free market.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.
It’s time to get rid of the Durbin interchange amendment. The evidence that this last-minute addition to the Dodd-Frank Act has done little more than line the pockets of big-box retailers is clear, and mounting. We know the amendment hasn’t helped American families. It’s been seven years since retailers promised consumers that they’d pay less at the checkout counter if Congress put price caps on debit card fees. Analysis of Federal Reserve data shows retailers have pocketed about $42 billion during this period, and shoppers are still waiting for those rollbacks. Continue Reading
Hundreds of state banking associations and banks sent a letter to House leadership explaining the importance of repealing the Durbin amendment. Read the full letter here.
Campaign for Liberty has joined an “open letter” to Chairman of the House Financial Services Committee Jeb Hensarling requesting repeal of the “Durbin Amendment.” This amendment, named after its sponsor Illinois Senator Dick Durbin, and part of the Dodd-Frank bill, limits “interchange fees,” which are the fees banks and credit unions charge businesses for processing credit card transactions. Sounds boring? It’s ok you can admit it. I hear you yawing. Or are you asking yourself: “Who cares about a fight between big retailers and big banks?” Well you should care since the costs of these price controls are born by consumers who are faced with fewer services and/or higher fees from their financial institutions. Continue Reading
After the repeal and replacement of Obamacare, the next big task facing Congress will be reform of the equally awful Dodd-Frank Act. House Financial Services Committee chairman Jeb Hensarling announced the vehicle for that task last year – the Financial CHOICE Act. Since it was announced, it has included repeal of the Durbin Amendment to Dodd-Frank, but there is now heavy lobbying to drop that provision. The special interests behind the lobbying are wrong. Repeal of the Durbin Amendment is vital for consumers. Continue Reading
Last fall, the House Financial Services Committee passed a Financial CHOICE Act that repealed harmful Dodd-Frank Act price controls. That provision would have benefited consumers and small businesses and strengthened small banks and credit unions. The new Congress not only should reconsider it—it should send it to the president’s desk. These price controls, which apply to interchange fees on debit cards issued by some banks, were added to the Dodd-Frank Act at the last minute and without a single hearing. They weren’t a vital part of the post-collapse legislation, but rather an unrelated proposal offered by Sen. Richard Durbin (D-IL) that merchant lobbying groups had been pushing for a while. Continue Reading
NAFCU President and CEO Dan Berger urged NAFCU members to reach out their lawmakers and push them to support the repeal of the Durbin debit interchange amendment in a message Thursday. The 2017 “Financial CHOICE Act,” which could be introduced in the coming weeks, is expected to include a provision to repeal the amendment, which was included as a late addition to the 2010 Dodd-Frank Act. Continue Reading
Credit union leagues in Nebraska and Indiana kept up the regulatory relief drumbeat this week, with calls for pro-consumer regulatory relief in local publications. League efforts in Massachusetts, New Jersey and Ohio led to the first wave of articles, and leagues in Nebraska and Indiana followed suit this week. Continue Reading