An economist who has authored research papers for the FileneResearch Institute was one of the leading voices in favor of theproposed debit interchange cap at a recent Washington DCconference.

PYMNTS.com sponsored the conference called “The Fed's ProposedDebit Card Regulations: Are They Reasonable and Who Will Win orLose” for about 100 executives and economists from universities,financial institutions, trade associations, retailers andregulatory bodies.

Many of the economists who spoke on the topic were critical ofthe proposed cap but Adam Levitin, an associate law professor atthe Georgetown University Law Center who has authored researchreports for the Filene Research Institute, defended it. Hegenerally downplayed the chances that banks would make up theirlost debit interchange income in fees on checking and otherproducts and services.

“That is certainly one possibility,” he said, “but there areothers. For example, banks could just accept smaller profits.”

Levitan argued that that since banks are in a very competitivemarket and were intent on maximizing their profit, the would beunlikely to put fees in place which would make their products lessattractive to customers. Instead, he contended, banks would justaccept the loss of profits from their debit card programs tocontinue maximizing their profits from other sources.

Significantly, Levitan was only only speakers at the conferencewho evaluated the debit interchange cap as an anti-trust measureand not as an economic one.