Berger fights back against Durbin amendment expansion ahead of Senate Judiciary hearing

The Senate Judiciary Committee, chaired by Senator Dick Durbin, D-Ill., will meet today to discuss interchange fees at a hearing slated for 10:00 a.m. Eastern time. Ahead of the hearing, NAFCU President and CEO Dan Berger wrote to the committee firmly expressing how government interference with debit interchange under the decades old section 1075 of the Dodd-Frank Act, also known as the ‘Durbin amendment,’ has harmed community financial institutions and consumers. Berger also voiced NAFCU’s strong opposition to any expansion of price controls and market manipulation related to credit interchange, through either antitrust or any related legislation.

NAFCU has strongly opposed efforts to employ arbitrary interchange price caps and routing restrictions under the Durbin Amendment, which according to Fed data has taken away $6 to $8 billion in revenue yearly from credit unions and banks. These caps are also one of the leading contributors to the decline in free checking accounts offered by banks and credit unions, according to a Government Accountability Office (GAO) study.

“While envisioned to help consumers, the ‘Durbin amendment’ has instead lined the pockets of big-box retailers, with little evidence of price cuts for consumers or benefits to small merchants,” said NAFCU President and CEO Dan Berger, reiterating that any efforts to extend interchange provisions to credit cards is not only irresponsible, but also reckless, and should be rejected by the committee.

Although merchants have argued that extending debit card routing requirements to credit cards would increase competition in the market, Berger noted that extending the failed Durbin Amendment to credit cards would only broaden the wealth gap between small businesses and giant retailers, which has been amplified over the past several years and especially during the pandemic.

 

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