The Electronic Payments Coalition (EPC) recently urged legislators to support a repeal of the Durbin amendment of the Dodd-Frank financial reform bill.
The amendment requires the Federal Reserve to limit fees charged to retailers for debit card processing. EPC said the amendment is nothing but a merchant markup that has allowed big-box retailers to pocket more than $36 billion since the amendment’s implementation.
“The numbers don’t lie: the Durbin amendment has been a complete failure for everyone except the big-box stores, who have padded their bottom lines to the tune of six to eight billion dollars each year,” Molly Wilkinson, executive director for the EPC, said. “Once consumers find out retailers aren’t keeping their word and passing on savings through lower prices, a majority of consumers support repealing the Durbin amendment, making it imperative Congress supports efforts to end this amendment.”
EPC said the amendment harms community banks and credit unions by making them pay higher costs to comply with the provisions and decreasing interchange revenue. Additionally, EPC said consumers are being impacted from retailers’ failure to implement strong data security standards in safeguarding sensitive consumer data information.
“Banks and financial institutions comply with the requirements of the Gramm-Leach-Bliley Act (GLBA) because they are vested in protecting their customers’ information and helping financial breaches to decline,” Wilkinson said. “The same effort should be required of others that handle sensitive customer data. As the number of retail breaches continues to grow, there needs to be similar standards on the retail side. Collaboration is key to best protecting consumers.”
Amendments to repeal parts of the Durbin provision were included in both H.R. 5465 and H.R. 2205. Both bills have yet to be voted on in the House.