Sen. Dick Durbin (D.-Ill.), who led the effort to cap debit interchange fees last year, responded to the banking and credit union lobbies’ letters to Congress last week, saying the cap has resulted in a victory for consumers.
In a letter to the American Bankers Association, the Illinois Democrat wrote, “Main Street businesses all across America that were previously being crushed by ever-rising debit swipe fees are now seeing real relief. 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.”
Durbin refuted conclusions by the ABA, CUNA and NAFCU in separate letters to Congress, writing, “Many consumers have been able to receive discounts for buying products such as gasoline and airline tickets with their debit cards, and many more have benefitted 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.”
In a Sept. 20 letter to leaders in Congress, Frank Keating, president of the ABA, called the consequences of the Durbin Amendment, which led to debit card caps enacted by the Federal Reserve, intrusive. “We do not believe it is in the interest of policymakers or the consumers they represent to repeat the mistakes of the past by expanding price controls to more aspects of our economy,” he wrote.
But Durbin rebutted the banking lobbyist, writing back, “Last week you sent a letter to the United States Congress in which you criticize the debit interchange reform law that Congress enacted as a ‘mistake,’” Durbin wrote. “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.”