As Rahm Emanuel once said said, “You never let a serious crisis go to waste.”
Fellow Illinois politician Senator Dick Durbin put that philosophy into practice during the writing of the Dodd-Frank Act, the monstrous piece of legislation falsely sold to the public as a solution to the financial crisis. Not only did Dodd-Frank not fix the problem of “too big to fail” (it made it worse), but by the time it made its way to President Obama’s desk it became filled with provisions that had nothing remotely to do with the crisis in the first place.
One such provision was the Durbin Amendment, which capped the price banks can charge retailers for making credit and debit card transactions. Prior to the amendment, financial institutions would charge various rates, largely dependent upon the size of the purchase. A card transaction on a $2 cup of coffee may cost a couple of pennies, while a $1000 laptop may cost a little over a dollar. A Fed study found that banks on average charged 1.15% per transaction.