CUNA pushes for Durbin repeal in joint letter, op-ed
CUNA joined with trade organizations in the press and in a letter to Congress urging the repeal of the Durbin Amendment, highlighting the damage it has done to consumers. The Durbin Amendment, part of the Dodd-Frank Act, requires a limit on fees charged to retailers for debit card purchases.
The letter was sent to Reps. Jeb Hensarling (R-Texas), chair of the House Financial Services Committee, and Rep. Randy Neugebauer (R-Texas), chair of the House Financial Services subcommittee on financial institutions and consumer credit.
In the letter, CUNA and its partners thank the congressmen for their legislative efforts to repeal the Durbin amendment. Hensarling’s Dodd-Frank alternative bill contains language repealing the amendment, and Neugebauer introduced a standalone bill to repeal the amendment.
“It is now clear that the only way to reverse the damaging impact on financial institutions of all sizes and customers is to repeal the Durbin amendment in its entirety,” the letter reads. “We support a well-regulated payment system based on laws that provide a frame-work for constant product improvement, but the Durbin Amendment did not serve any traditional regulatory purpose--it simply enshrined into law a “permanent” economic benefit for one well-heeled industry.”
The letter cites the increased cost to credit unions and community banks, which were intended to be exempt from the law.
“The Durbin Amendment intended to exclude small issuers from interchange fee-ceiling restrictions, but the law offers no such exemption from the costly and burdensome network routing and exclusivity provisions--a process that involves substantial and recurring administrative costs on top of an already challenging cost environment,” the letter reads.
In the op-ed, published in The Hill, CUNA and its partners praise the legislation from Hensarling and Neugebauer, and cites studies that show customers have not seen any point-of-sale price drop in the wake of the Durbin Amendment.
“For more than four years price-fixed interchange fees have enabled retailers to enjoy an extra $36 billion in revenue under the Durbin Amendment--at the expense of customers,” the op-ed reads. “Despite assurances that this income would be passed on to debit customers in the form of lower prices, retailers have taken advantage of this defective policy to pad their bottom lines leaving customers with broken promises and empty wallets.”
The joint letter was signed by CUNA, the American Bankers Association, Consumer Bankers Association, Financial Services Roundtable, Independent Community Bankers of America (CBA) and National Association of Federal Credit Unions.
The op-ed was penned by CUNA President/CEO Jim Nussle, along with CBA President/CEO Richard Hunt, ICBA President/CEO Camden Fine and NAFCU President/CEO B. Dan Berger.