In a recent letter, Sen. Dick Durbin (D-Ill.) wrote to reassure the Illinois Bankers Association, Illinois Credit Union League and Community Bankers Association of Illinois that his zealous financial regulations will benefit them.
Smaller banks and credit unions have expressed concern that the Durbin Amendment would hurt their ability to compete in the debit card issuance market.
“Your institutions expressed concern that Visa and MasterCard, which fix interchange rates, might not adopt a two-tier rate schedule with separate categories for large regulated banks and smaller unregulated institutions,” Durbin wrote, ENewsPF.com reports. “This concern has proved unfounded, as Visa and MasterCard have both adopted two-tier schedules that will enable your institutions to continue receiving the rates you are accustomed to.”
Durbin’s letter attempted to squash another concern among the organizations that large debit card issuers might work with large banks to adjust rates over time in order to hamper the ability of smaller institutions to issue debit cards.
“I want you to know that I have been alert to this possibility, and that I am committed to protecting small institutions against such actions by the card networks and big banks,” Durbin wrote, according to ENewsPF.com.
Durbin included language in the bill that provides Fiscal Year 2012 funding for the Federal Trade Commission that requires the FTC to issue a report within one year on the actions it has taken to ensure card networks are complying with the Durbin Amendment.