The Electronic Payments Coalition today announced its support for the bipartisan legislation introduced in the House of Representatives to repeal the Durbin amendment on debit interchange. Congressman Jason Chaffetz (R-UT) and Congressman Bill Owens (D-NY) are the lead co-sponsors.
The Durbin amendment, part of the Dodd-Frank financial reform bill, caps the amount banks can charge retailers for swiping their debit cards. The cap limits the fee to an average of 24 cents per transaction instead of the previous industry average of 44 cents, and several banks have already announced various fees they say is needed to make up for lost revenue. The amendment was named for its primary sponsor, Sen. Dick Durbin (D-Ill.)
Regarding the proposed repeal, EPC spokeswoman Trish Wexler issued a statement saying, "The Durbin amendment was forced into law despite repeated warnings from consumer advocates, regulators, and economists on the dire consequences that await consumers. We now see this unfortunate situation for consumers playing out in the form of higher costs to own and use a debit card, with no promise from merchants that any of their savings will be passed on at the register."
Owens and Chaffetz have both said they support the repeal of the amendment because they believe it amounts to government intervention in the free market and compels banks to charge consumers higher fees to generate the revenue lost from the cap.
The EPC is a trade association representing credit unions, banks, and payment card networks.