Sen. Richard Durbin (D-Ill.) defended congressional intervention in the battle over interchange fees ub a Tuesday letter to the American Bankers Association.
The letter was in response to a recent ABA letter sent last week urging Congress to reject calls by some retail groups to impose even greater price controls. Frank Keating, the president and CEO of the ABA, said that the swipe fee reform was a “mistake.”
“Last week you sent a letter to the [U.S.] Congress in which you criticize the debit interchange reform law that Congress enacted as a ‘mistake,’” Durbin said in the letter. “While the banking industry may resent that its enormous lobbying effort did not produce a different outcome, a defeat is not the same as a mistake.”
Keating said that the recent settlement between retailers, Visa and MasterCard “represents a historic opportunity for policymakers to put the debate over further government price controls behind them.”
Durbin said, however, that those whose interests were not represented in the “secret settlement” would be “negatively impacted by its terms.”
“Adoption of this proposed settlement would almost certainly guarantee that future [c]ongressional intervention will be necessary to salvage these stakeholders’ interests and protect them from Visa and MasterCard’s abuses,” Durbin said in the letter.
Additionally, Durbin said that Main Street businesses and American consumers have benefited as a result of the reform.
“Main Street businesses all across America that were previously being crushed by ever-rising debit swipe fees are now seeing real relief,” Durbin said. “This relief has been achieved without any significant negative impact on the small banks and credit unions that were exempted from interchange regulation—in fact, these small financial institutions have been thriving since reform took effect. Many consumers have been able to receive discounts for buying products…with their debit cards, and many more have benefited as merchants have been able to keep prices down as a result of lower interchange costs. Far from being a mistake, debit interchange reform is showing real results.”