A coalition of more than 400 large and small retailers, as well as the National Association of Convenience Stores (NACS) and National Restaurant Association, have urged Congress to uphold debit card reforms.
Debit swipe fee reform, also known as the Durbin Amendment, was signed into law in 2010 as part of the Dodd-Frank Wall Street Reform Act. Debit reform limits price-fixing by the card networks and largest issuers by setting a reasonable fee for those with $10 billion in assets or more (approximately 1.6 percent of banks). Debit reform also fosters competition among debit networks by obligating banks to allow merchants to choose their own network routing option for each debit transaction.
There is legislation proposed in Congress seeking to repeal the Durbin Amendment by U.S. Rep. Jeb Hensarling (R-Texas), whose draft Financial Choice Act includes a provision to repeal the Durbin Amendment, and Rep. Randy Neugebauer (R-Texas), whose stand-alone bill (House Resolution 5465) would repeal the Durbin Amendment.
According to the Merchants Payments Coalition, of which NACS helped found in 2004, if debit reform is repealed, global card companies would tighten their control on the debit marketplace to prevent choice and price-fix fees at massive markups. Exorbitant swipe fees raise the price of everything consumers buy, whether they use a card or not, which hurts consumers and businesses large and small.
“Debit card reforms have been a major step in the right direction,” the retailers wrote, “and any removal of those reforms would be a monumental step in the wrong direction for U.S. businesses and consumers.”
NACS and its members are urging Congress to protect debit swipe fee reform and keep the Durbin Amendment intact. Since its implementation, NACS estimates debit reform has resulted in consumer savings of nearly $6 billion per year and supported more than 37,000 jobs per year.