It is sometimes said that the definition of a true compromise is one in which neither party is really happy about the end result. If you accept that definition, perhaps the Durbin Amendment represents the ultimate compromise.
The Durbin Amendment, a last-minute provision of Dodd-Frank Act, put a cap on the fees banks over $10 billion in assets could collect on debit card transactions – or rather, it directed the Federal Reserve to regulate that matter. But the cap on interchange fees was supposed to make up for it, at least to consumers, by enabling merchants to lower their prices because they would save a bundle on swipe fees.
Not so much. According to a recent study out of the Federal Reserve Bank of Richmond, the Durbin Amendment resulted in neither cost savings to consumers, nor (interestingly enough) savings to merchants.
“We were saying this back when this was first proposed, that it wasn’t going to help the consumers at all and that there were going to be a lot of unintended consequences,” said Jon Skarin, senior vice president at the Massachusetts Bankers Association. “I think the Richmond Fed has proven both of those things to be accurate.”