Sen. Dick Durbin (D-Ill.) criticized Parkmobile on Friday after the company notified customers of a rate increase resulting from the Durbin Amendment drafted by Durbin and included in the 2010 Dodd-Frank Act.
“Your company’s email and press release incorrectly blame the Durbin Amendment for increasing your processing fees,” Durbin said in a letter to Albert Bogaard, the CEO of Parkmobile, according to National Journal. “My amendment did not raise these fees.”
In a Thursday letter to customers, Parkmobile, which allows customers to remotely pay on parking meters, said that transaction fees “will increase from $0.32 to $0.45 due to increased costs triggered by recent federal legislative reform enacted by the Dodd-Frank Wall Street Reform and Consumers Protection Act’s Durbin Amendment.”
Laurens Eckelboom, the executive vice president of sales at Parkmobile, said that the company had been absorbing the transaction costs of the fees since March but only recently decided to announce the rate increase, DCist reports.
Eckelboom said that before the amendment took effect, credit card companies could charge retailers fees based on the cost of the item sold. In March, credit card companies raised the company’s fees by 20 cents to recoup revenue lost due to the inability to charge merchants more for larger purchases.
“That was pretty ugly,” Eckelboom said, referring to the after-effects of the announcement, according to DCist.
As an alternative to paying the 45 cent transaction fee, Parkmobile has offered customers enrollment in a prepaid program that will carry a 30 cent fee instead.
“We have decided not to pass along these increased fees until we were able to come up with a solution,” Eckelboom said, National Journal reports.
Durbin said that Parkmobile has misplaced the blame for increasing its fees. In response to the Durbin Amendment, Visa and MasterCard eliminated small-purchase discounts previously offered to merchants.
“Visa and MasterCard raised your fees, and as a merchant you were helpless to stop them short of the ceiling the new law created,” Durbin said, according to National Journal.