Durbin to MC, Visa: Stop Your Threats…Or Else
June 4, 2010
Sen. Richard Durbin, who spearheaded the inclusion of an amendment to the Senate’s version of financial reform that limits swipe fees on debit cards, has lashed out at MasterCard and Visa for the way they have lobbied against the measure since its approval. Durbin said the card network’s opposition amounts to scare tactics and is “threatening” to small banks and credit unions. In a letter to the CEOs of MasterCard and Visa, Durbin warned the companies to cease their tactics and suggested their lack of cooperation on the matter could open them to anti-trust proceedings. “It appears that in an effort to frighten small banks and credit unions into opposing the amendment, your companies are threatening to make changes to your small bank interchange fee rates and to your network operating rules,” he wrote. “The simple fact is that small banks would not be harmed or punished under the amendment unless your companies decide to harm or punish them. Further, I warn you that if your companies coordinate with each other or with your largest member banks to make changes to your fees and rules, it would raise serious concerns that you are engaging in an unlawful restraint of trade.” Durbin noted that the limitations on debit interchange called for in his amendment to the Restoring American Financial Stability Act of 2010 will affect only the largest 1 percent of issuing banks in the U.S., referring to the exemption for institutions that have less than $10 billion in assets. A conference committee made up of House and Senate members will now attempt to resolve the differences between the versions of financial reform passed by both bodies. The House reform package did not address swipe fees.