October 1 marks the one year anniversary of the enactment of the controversial Durbin Amendment, but new research reveals that, despite $8 billion in savings by retailers, consumers are paying 1.5 percent more at the register.
The Durbin Amendment capped interchange fees, the amount a bank could charge a merchant to process a debit transaction.
When retailers made the case for the legislation in 2010, they told Congress that savings resulting from the provision would be passed to the consumer in the form of lower prices. Retailers have returned to Congress to request even further action, saying that the interchange fee cap doesn’t go far enough.
Another study by BankRate.com revealed that checking costs have also risen, with some rising more than 25 percent. The survey found that the increase is due, in part, to these interchange fee caps and regulations that limit overdraft fees.
“With a wink and a nod, giant retailers promised to lower prices for their customers if Congress passed the Durbin Amendment,” Trish Wexler, a spokeswoman for the Electronic Payments Coalition, said, according to Pymnts.com. “One year after implementation, retailers have taken home $8 billion while many of their customers pay more at the register. Let’s just call a spade a spade—this was a political handout to big box retailers who are now scrambling to make excuses for why they couldn’t pass these savings along to customers.”