Filene Researcher a Dissenting Voice on Debit Cap
An economist who has authored research papers for the Filene Research Institute was one of the leading voices in favor of the proposed debit interchange cap at a recent Washington DC conference.
PYMNTS.com sponsored the conference called “The Fed's Proposed Debit Card Regulations: Are They Reasonable and Who Will Win or Lose” for about 100 executives and economists from universities, financial institutions, trade associations, retailers and regulatory bodies.
Many of the economists who spoke on the topic were critical of the proposed cap but Adam Levitin, an associate law professor at the Georgetown University Law Center who has authored research reports for the Filene Research Institute, defended it. He generally downplayed the chances that banks would make up their lost debit interchange income in fees on checking and other products and services.
“That is certainly one possibility,” he said, “but there are others. For example, banks could just accept smaller profits.”
Levitan argued that that since banks are in a very competitive market and were intent on maximizing their profit, the would be unlikely to put fees in place which would make their products less attractive to customers. Instead, he contended, banks would just accept the loss of profits from their debit card programs to continue maximizing their profits from other sources.
Significantly, Levitan was only only speakers at the conference who evaluated the debit interchange cap as an anti-trust measure and not as an economic one.