The American Bankers Association is supporting legislation in Congress that would repeal the Durbin Amendment.
Ken Clayton, the ABA’s chief counsel, said that the association commends Reps. Jason Chaffetz (R-Utah) and Bill Owens (D-N.Y.) for their bill that would repeal a new law that implemented government price controls.
The Durbin Amendment, according to the ABA, costs banks a 45 percent loss in revenue and reduces their ability to offer low-cost accounts, fraud coverage and a safe and efficient U.S. payments system.
The government price fixing, Clayton said, will result in an unprecedented transfer in costs from retailers to consumers, with consumers ultimately paying higher fees for basic bank services.
“This is a perfect example of the dangers of price controls and the inefficiency of government intervention in the free market,” Chaffetz said in a statement after releasing his bill. “The Durbin Amendment is an affront to consumers and the banking industry. These legislatively enacted price controls have compelled banks to charge consumers higher (and in some cases new) fees to make up for lost revenue.”
The Durbin Amendment’s chief sponsor, Sen. Dick Durbin (D-Ill.), said that the repeal bill is just “another big bank bailout,” TheHill.com reports.
“Last year’s reforms added fairness, transparency and competition to a market that operated for years without,” Durbin spokesman Max Gleischman said, according to TheHill.com. “Going back to the old system would take money out of the pockets of consumers to pad the profits of the nation’s largest banks.”