Congressman Jason Chaffetz (R-Utah) and Congressman Bill Owens (D-N.Y.) introduced legislation on Wednesday to repeal the debit card interchange price provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, also known as the Durbin Amendment.
“The Durbin Amendment is harmful for community banks, credit unions and the communities they serve,” Owens said. “While Congress clearly intended to exempt these smaller institutions from the cap on interchange fees, it’s clear the Durbin Amendment will have unintended costly consequences for my constituents and their checking accounts.”
Chaffetz and Owens said that their goal in repealing the Durbin Amendment is to restore balance to the electronic payments system.
“This is a perfect example of the dangers of price controls and the inefficiency of government intervention in the free market,” Chaffetz said. “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 place a cap on pre-transaction swipe fees charged to retailers by banks where purchases are made via debit cards. The Durbin Amendment limits the fees to 21 cents per transaction, down from approximately 44 cents per transaction prior to its implementation on oct. 1.
The lowered cap fees have resulted in higher fees being passed down to consumers.
“Repealing the Durbin Amendment fixes the disastrous consequences of this bill," Chaffetz said. "Consumers everywhere are living on the margins and making do with less. Congress must repeal this egregious provision that increases the costs of doing business on everyone."