Despite warnings from financial experts about the negative consequences for consumers, the Durbin Amendment was officially implemented on Oct. 1.
Many financial institutions have already reacted to the new regulation by raising fees or adding new fees to services that were once offered for free.
"Recently a number of banks have announced new fees for bank services,” Frank Keating, the president and CEO of the American Bankers Association, said. “Make no mistake about it – these fees are the direct result of government price fixing that has fundamentally altered the economics of offering a debit card.”
According to Keating, the Durbin Amendment gave major retailers a massive boost in profits while forcing banks to take a substantial cut in their revenue.
“Many economists predicted that this direct transfer of costs from retailers to everyday Americans would result in higher fees for basic banking services and threaten our nation's community banks,” Keating said. “Unfortunately, we are now seeing that result.”
Trish Wexler, the spokesperson for the Electronic Payments Coalition, recently issued a statement accusing the sponsor of the new rule, Sen. Dick Durbin (D-Ill.), of creating chaos and placing blame on everyone but himself for the added expenses for consumers.
“Senator Durbin has spent years pushing the agenda of giant retailers, while flatly ignoring repeated warnings by consumer advocates, economists, and the financial services industry about precisely this type of consequence,” Wexler said. “The truth is that Senator Durbin knew that banks and credit unions across the board would have to raise prices. Instead of heeding our warnings and protecting consumers, he chose to put millions of dollars into the pockets of giant retailers."