Sen. Dick Durbin (D-Ill.) disputed claims on Sunday that his legislation to cap debit card interchange fees has a detrimental impact on consumers.
Critics claim that the Durbin Amendment is causing banks to add new fees, end debit card rewards programs and are causing layoffs, SJ-R.com reports. Durbin said that consumers who hold accounts with banks that require a monthly fee should find another bank.
Capping the interchange fees that banks are allowed to charge merchants for debit card swipes, according to Durbin, saves retailers an estimated $6 billion annually and allows them to pass the savings onto consumers and possibly hire additional people.
“This fee is an outrageous burden on consumers,” Durbin said, according to SJ-R.com. “This makes a hidden fee very visible to consumers, and it also says to the banks that the overcharging of retailers across the United States has to end.”
Many retailers, however, have not agreed to pass on their savings, leading observers to speculate whether or not they will pocket the money instead.
The Durbin Amendment, which took effect on Oct. 1, applies to financial institutions worth $10 billion or more in assets. Many of the U.S.’s largest banks are already finding ways to charge their customers more in order to make up for the lost interchange revenue.
Bank of America recently announced that it will start charging its debit card account users a $5 monthly fee. Other banks, including Wells Fargo, SunTrust and Chase, have started testing fees on checking accounts.
Bank of America said its new fee was implemented in order “to continue to offer the convenience of a debit card with the full range of added features customers have come to expect,” SJ-R.com reports.