More than two months after the enactment of the Durbin Amendment, some financial industry observers say it has hit those least able to absorb its impact.
Frank Keating, the president and CEO of the American Bankers Association, said that the nation’s largest retailers have so far benefited the most, receiving as much as $7 billion annually from the new rule, SunTimes.com reports.
Consumers, the group Sen. Dick Durbin (D-Ill.) promised would benefit the most from the rule, are reportedly facing higher expenses.
Banks have been hit with a 45 percent reduction in profits since the rule’s implementation. In the past, that revenue was used to provide inexpensive accounts and to pay for fraud. As a result of the revenue loss, banks have been forced to raise rates on basic banking services.
“Bank customers are now paying for services they previously enjoyed free,” Keating wrote, according to SunTimes.com. “Free checking is becoming harder to find and debit rewards programs have become a thing of the past. These are real consequences as banks of all sizes continue to adjust to government-imposed losses in revenue.”
The Federal Reserve Bank of Boston recently released a study of the Durbin Amendment that predicted the rule would most negatively affect low-income Americans.
Keating suggested that Durbin call for an investigation into whether or not large retailers have passed on any of their savings to consumers, SunTimes.com reports.