Durbin Statement on Efforts to Delay Implementation of New Interchange Fee Law
[WASHINGTON, D.C.] – Assistant Senate Majority Leader Dick Durbin (D-IL) issued the following statement today on legislative efforts to delay implementation of common sense reforms to the interchange fee system:
“Every month we delay limiting the amount banks and credit card companies charge merchants means another $1.3 billion bailout for Visa, MasterCard and their big bank allies. The $13 trillion banking industry doesn’t need another handout - especially one paid for by small business and American consumers. I will strongly oppose any attempts to line the pockets of the credit card giants and Wall Street banks by delaying this common sense, pro-consumer legislation. ”
Each month, card companies like Visa and MasterCard require small businesses, merchants, charities, universities and government agencies to pay more than $1.3 billion in non-negotiable debit interchange fees to the banks that issue debit cards. Of the $16.2 billion in annual fees, half is estimated to go to just ten giant banks. Interchange fees are fixed by Visa and MasterCard on behalf of their big bank allies. There is no competition in the interchange market and the Visa and MasterCard duopoly continues to raise fees which are passed on to consumers in the form of higher retail prices for gas and groceries.
The Federal Reserve was directed to establish standards to ensure that debit interchange fees are “reasonable and proportional” to the real cost of processing a debit card transaction by a bipartisan amendment Durbin included in the Dodd-Frank Wall Street Reform and Consumer Protection Act. Final regulations will be released in April.
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