More than fifty state bankers associations have rallied behind legislation from Rep. Randy Neugebauer, R-Texas, to repeal caps on debit interchange fees.
The groups argue in a letter Friday to Neugebaurer and other members of the House Financial Services Committee that an amendment added to the Dodd-Frank Act by Sen. Richard Durbin, D-Ill., failed to help consumers and instead just benefited retailers. While the amendment has not dramatically changed payment company business models, it has sparked legal battles for years and has also played a role in the EMV migration as it took the industry several years to develop compliant routing protocols for debit transactions.
“The amendment capped debit card rates under the false promises that it would somehow benefit consumers through lower prices at the cash register and that community banks and their customers would not be harmed,” the letter says. “Congress deserves to know that an industry will keep the promises they make during the lawmaking process, but retailers cannot produce evidence that they have returned the proceeds of the Durbin Amendment to consumers in the form of lower prices.”
House Financial Services Committee Chairman Jeb Hensarling, R-Texas, has also proposed legislation that would roll back the Durbin Amendment.
Molly Wilkinson, executive director of the Electronic Payments Coalition, whose members include the American Bankers Association, Consumer Bankers Association, Credit Union National Association, Financial Services Roundtable, Independent Community Bankers of America and National Association of Federal Credit Unions also released a statement Friday endorsing Hensarling’s bill.
“The Electronic Payments Coalition supports the hard work of Chairman Hensarling and his push to repeal the Durbin Amendment as part of the Financial CHOICE Act… we thank Chairman Hensarling for his leadership and commitment to end this failed policy,” said Wilkinson.