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Durbin Amendment expansion would undermine payments ecosystem

July 26, 2021

CUNA joined other organizations Monday to express strong opposition to any expansion of the Durbin Amendment, which caps interchange fees. The letter was sent to leaders of the House Financial Services Committee and the Senate Banking, Housing, and Urban Affairs Committee.

Retail organizations called for the Durbin Amendment cap to be extended from debit cards to credit cards in a June letter.

“Support for any legislation on this topic would undermine the overall health and security of the U.S. payments ecosystem and have significant negative implications for consumers and small businesses at a time when the U.S. economy is just starting to recover from a global pandemic,” the letter reads. “Already, the COVID-19 pandemic and resulting regulations created a $250 billion wealth transfer from small businesses to big-box retailers—and an expansion of the Durbin Amendment would only further widen that gap.”

The letter also notes:

  • Legislation in this space is unnecessary because the payments industry is more competitive than ever, with new players entering all the time, giving consumers and merchants a range of options.
  • This effort by merchant groups to shift billions of dollars of consumer credit card spending to less secure, less innovative, and higher-risk transactions would make America’s payment system worse and put consumers in a vulnerable position.
  • Having the government take away consumers’ choice to pick their credit card, and give it to large merchants, is fundamentally wrong.
  • The Durbin Amendment is a failed government policy, leading to consumer prices increasing, far fewer community banks and credit unions across the country, and several small debit networks going out of business.
  • The merchant proposal would reduce availability of credit to U.S. consumers and small businesses.
  • Congress should not require the reengineering of the entire payments system just to benefit a small group of the largest retailers while causing small businesses to suffer.