EPC Chairman Jeff Tassey: Expanding Interchange Regulations Will Hurt Consumers Again

“Expanding the Durbin Amendment will inflate big retailers’ record profits at the expense of consumers, small businesses, community banks, and credit unions.”

WASHINGTON, D.C. — Today, Jeff Tassey, board chairman of the Electronic Payments Coalition (EPC), released the following statement in response to the Senate Judiciary Committee hearing on interchange:

“Here we go again. Thirteen years ago, the same witnesses lobbying for interchange price controls promised the House Judiciary Committee that merchants would pass their savings on to consumers. They didn’t. The Federal Reserve, the General Accountability Office, and multiple studies show that consumers got stuck with higher prices because of the Durbin Amendment. There is no evidence that merchants cut prices for consumers. Almost all merchants raised prices after Durbin.

“Now merchant lobbyists are back at it, promising that consumers will see lower prices if Congress expands the Durbin Amendment. They say that interchange rates cause inflation. Not true. Interchange rates have stayed flat as merchants raised prices and made record profits. The reality is that this misguided policy would only inflate big retailers’ record profits at the expense of consumers, small businesses, community banks, and credit unions. This isn’t speculation. A decade of data proves the most vulnerable in our communities will suffer if the Durbin Amendment is expanded.

“The value and innovation of electronic payments were essential in keeping small businesses open throughout the pandemic. Unlike big-box retailers, financial institutions do not simply pocket interchange revenues. Instead, they invest in critical resources and develop technologies that keep transactions safe and secure.

“The Durbin Amendment increased costs for consumers, small businesses, community banks, and credit unions. Congress should not expand it.”

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To learn more about the harmful effects of the Durbin Amendment, read the blog post published by EPC. It highlights the Government Accountability Office’s (GAO) recently released report showing how interchange regulations on debit card purchases, enacted through the Durbin Amendment, ranked as one of the most harmful laws negatively impacting the availability of fundamental banking services.

Additionally, on March 10, EPC sent a letter to Congressional leaders on the Senate Committee on Banking and the House Committee on Financial Services outlining the essential role of financial institutions in supporting e-commerce and helping Main Street businesses survive pandemic-era operating restrictions. The EPC letter urges lawmakers to work in a bipartisan effort to repeal the Durbin Amendment, which continues to undermine critical investments in payment technologies and fraud protection that have helped small businesses stay open during pandemic-caused lockdowns.