WASHINGTON -- Senator Dick Durbin (D-Ill.) said that he has sent a letter to Frank Keating, president and CEO of the American Bankers Association (ABA), to "set the record straight" about swipe fee reform. The correspondence was in response to a letter the ABA sent to congressional leaders last week calling swipe-fee reform a "mistake."
Congress passed the Durbin Amendment as part of the Dodd-Frank Wall Street Reform & Consumer Protection Act of 2010, which required Visa and MasterCard to end the practice of setting fees together in secret and capping them at 21 cents. It took effect in October 2011.
(Click here for previous CSP Daily News coverage of the swipe-fee issue.)
Dick DurbinThe ABA's letter also said, "The net effect of [the Durbin Amendment] has been an increase in profits at big-box retailers, higher costs to small merchants, significant reductions in the revenue available to banks to serve local communities and no sign of the lower retail prices consumers were promised."
Durbin responded: "Last week, you sent a letter to the [U.S.] Congress in which you criticize the debit interchange reform law that Congress enacted as a 'mistake.' While the banking industry may resent that its enormous lobbying effort did not produce a different outcome, a defeat is not the same as a mistake."
"Main Street businesses all across America that were previously being crushed by ever-rising debit swipe fees are now seeing real relief. This relief has been achieved without any significant negative impact on the small banks and credit unions that were exempted from interchange regulation--in fact, these small financial institutions have been thriving since reform took effect. Many consumers have been able to receive discounts for buying products such as gasoline and airline tickets with their debit cards, and many more have benefitted as merchants have been able to keep prices down as a result of lower interchange costs. Far from being a mistake, debit interchange reform is showing real results."