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Despite Retailer Claims, Durbin Amendment Has Harmed Community Banks, Credit Unions and Small Businesses
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.
Philadelphia Fed Analysis of the Effect of Interchange Fee Restrictions on Small Banks Is Incomplete
The Federal Reserve Bank of Philadelphia published a brief yet incomplete note on the impact of Dodd-Frank on small banks. This resource clarifies positions stated in their analysis and provides further information.
University of Chicago Law School Analysis Finds Consumers Will Lose $22 Billion as a Result of the Durbin amendment Nearly three years after the implementation of the Durbin amendment, consumers have yet to see the savings that retailers promised. Instead, they are paying the same or higher prices for goods and services and more in consumer banking costs. An analysis by University of Chicago Law School economists David S. Evans, Howard Chang, and Steven Joyce entitled “The Impact of the U.S. Debit Card Interchange Fee Regulation on Consumer Welfare: An Event Study Analysis” quantifies just how much consumers are expected to lose, rather than gain, from The Durbin amendment. The paper analyzes stock prices to determine the impact to consumers from the Durbin Amendment. The analysis finds that retailers gained a $7 billion yearly windfall starting in 2011 as a result of the Durbin amendment. At the same time, consumers … Continue reading
The Federal Reserve Bank of Richmond published the report “Debit Card Interchange Fee Regulation: Some Assessments and Considerations” in the third quarter 2012 issue of Economic Quarterly. The report analyzes the debit card interchange fee regulation introduced by the Durbin amendment and its first-year impact on different players in the debit card market. The report specifically notes the unintended consequences of the Durbin amendment on small-ticket sales and rising bank fees.
The survey found that the costs of checking have risen dramatically, with some bank fees rising 25 percent or more. The survey finds that the rise in fees is, in part, a result of recent regulations limiting overdraft fees and capping the cost of debit card interchange fees. According to the survey, only 39 percent of banks offer a checking account with no minimum balance requirement and no monthly checking fee, down from 45 percent in 2011.