One year after the Durbin amendment went into effect, financial institutions say its cap on debit card interchange has not saved consumers any money and merely served to fatten retailer profits.

The law took effect Oct. 1, 2011.

A study from the Electronic Payments Coalition titled “Where's the Debit Discount – The Durbin Effect: Retailers Gain Without Consumer Benefit” reported that the Durbin Amendment's debit cap has saved retailers $8 billion since then, a windfall that the group, which includes credit unions, charged retailers have not passed on to consumers.

As evidence, the group compared prices on various items at various retailers with prices on the same items one year before the cap went into place.

If the Durbin savings were being passed to consumers, the group reasoned, those prices should be the same or less than they were last year. Instead, the group said it found consumers paid:

$2.22 (or 6.6%) more for the same items at a Home Depot in Atlanta. Despite this retailer's claims to the contrary, its shoppers saw price increases at this chain more than any other, the EPC said.
$0.80 (or 5.4%) more for the same items at a Walmart in Portland, Maine.
$1 (or 2.6%) more for the same items at a 7-Eleven in Washington, D.C.
$0.30 (or 2.9%) more for the same items at a Walgreens in Boston.

“With a wink and a nod, giant retailers promised to lower prices for their customers if Congress passed the Durbin amendment. One year after implementation, retailers have taken home $8 billion while many of their customers pay more at the register,” said Trish Wexler, an EPC spokeswoman.

“Let's just call a spade a spade – this was a political handout to big box retailers, who are now scrambling to make excuses for why they couldn't pass these savings along to customers,” Wexler said.

Retailers have also weighed in as the anniversary approached with their opinion that consumers have saved money because of the law.

Instant Insights /

Financial Institutions Claim Debit Cap Costs Consumers

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