Rep. Neugebauer: Durbin Amendment Helps Retailers, Not Consumers
“Rent-seeking” is a widely recognized economics term that refers to when people or groups try to obtain economic benefits for themselves through a subsidy in the political arena. In Washington, the term has special significance. Special-interest groups regularly try to gain subsidies by securing a special regulation that disadvantages competitors.
In 2010, the powerful retail lobby went “rent-seeking” and found its champion in Sen. Dick Durbin, D. Ill. His debit interchange fee provision inserted in the Dodd-Frank Act has resulted in the successful transfer of more than $35 billion from one sector of the economy to another. The Durbin amendment, as it has come to be called, mandated that the Federal Reserve cap the “swipe fees” that banks charge retailers for the service of processing electronic payments.