Two legislators have announced they will file a bipartisan bill in the U.S. House of Representatives to repeal the Durbin amendment and remove its cap on debit card interchange for debit issuers of over $10 billion in assets.
U.S. Reps. Jason Chaffetz (R-Utah) and Bill Owens (D-N.Y.) said their measure “would restore balance” to the electronic payments system.
“This is a perfect example of the dangers of price controls and the inefficiency of government intervention in the free market,” Chaffetz said.
“The Durbin amendment is an affront to consumers and the banking industry. These legislatively enacted price controls have compelled banks to charge consumers higher (and in some cases new) fees to make up for lost revenue,” he said.
The Durbin amendment and its regulations capped debit card interchange at roughly 21 cents per transaction for large-asset debit card issuers, down sharply from the previous average of 44 cents.
A series of larger banks, including most notably Bank of America, have blamed the amendment for forcing to add fees to debit card use.
“Repealing the Durbin amendment fixes the disastrous consequences of this bill. Consumers everywhere are living on the margins and making do with less. Congress must repeal this egregious provision that increases the costs of doing business on everyone,” said Chaffetz.
“The Durbin amendment is harmful for community banks, credit unions and the communities they serve,” said Owens. “While Congress clearly intended to exempt these smaller institutions from the cap on interchange fees, it’s clear the Durbin amendment will have unintended costly consequences for my constituents and their checking accounts.”