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Heartland Institute: Dodd-Frank regulatory overreaction

| Heartland Institute


Exhibit A is Dodd-Frank federal price controls on debit card transaction fees charged to merchants by bank card issuers. Before Dodd-Frank, card issuers charged merchants 1-3 precent per transaction, 1.15 percent on average, to cover their costs maintaining debit cards.

But Illinois-based Walgreens complained to Minority Whip Sen. Dick Durbin of Illinois that these fees were their fourth-largest cost item. Durbin responded to his major contributor with a Dodd-Frank amendment empowering the Fed to adopt regulation limiting those fees. The Fed imposed a national limit on debit card fees of 21 cents plus 0.05 percent of the customer’s charge to the card.

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