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.