Durbin debit card mandates foreshadow impact of Durbin-Marshall credit card mandates
WASHINGTON, D.C. – As part of its month-long national campaign marking the 14th anniversary of the Durbin Amendment, the Electronic Payments Coalition (EPC) today completed a Halloween-themed Hill drop to Congressional offices to highlight the harm caused by the debit card mandates to consumers, small businesses, and community financial institutions.
The packages delivered to offices included a fact sheet outlining the negative impacts of the Durbin debit mandates — and warning how similar repercussions would hit the credit card market if Congress enacts mandates proposed by Senators Dick Durbin (D-Ill.) and Roger Marshall (R-Kan.).
When Senator Durbin inserted the debit mandates into legislation on the Senate floor, lobbyists for large corporate retailers promised that the savings would be passed along to consumers. The reality was quite different. Then–Home Depot CFO Carol Tomé admitted the savings would “benefit” Home Depot to the tune of $35 million annually without mentioning a single penny of savings for consumers.
Those broken promises were not limited to Home Depot. According to the Federal Reserve Bank of Richmond, 98% of retailers actually raised prices or kept them the same following the debit card mandates while consumers saw:
- A 60% increase in debit card fraud (Forbes);
- A 42% decline in the share of banks offering free checking (Harvard Kennedy School); and
- A loss of access to debit card rewards (NBC News).
Consumers were not the only ones harmed. Community financial institutions — supposedly exempt from the mandates — saw declines in interchange revenue, while small mom-and-pop businesses faced doubled processing costs for low-dollar debit transactions.
“Corporate mega-store lobbyists and a few Washington politicians are pushing new government mandates as a win for consumers, but they are really costly tricks instead of treats for consumers and small businesses,” said EPC Executive Chairman Richard Hunt. “These mandates drive up prices, threaten valuable reward programs and jeopardize your data security and fraud protections. Government mandates on your credit card are not reform — they are giveaways to the largest corporate retailers paid for by American cardholders and the small businesses these mega-stores are trying to drive out of business.”
A copy of EPC’s fact sheet is available here or by clicking on the image below.
