N.Y., Utah Reps Introduce Bill to Repeal Swipe Fee Reform
Oct. 17, 2011
The Durbin Amendment capping debit interchange fees came under renewed attack late last week when U.S. Representatives from both sides of the aisle introduced legislation to repeal the controversial measure. The Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act, which limits the fee to an average of 24 cents per transaction instead of the previous industry average of 44 cents, went into effect Oct. 1. Rep. Jason Chaffetz (R-Utah), who co-sponsored the bill with New York Democrat Bill Owens, said “these legislatively enacted price controls have compelled banks to charge consumers higher (and in some cases new) fees to make up for lost revenue.” While the amendment included an exemption from the new cap for smaller banks, the banking industry has repeatedly argued that competitive forces will require them to adopt comparable fees to the big banks. Owens said he was backing the repeal bill because smaller institutions would bear a disproportionate burden. “While Congress clearly intended to exempt these smaller institutions from the cap on interchange fees, it’s clear the Durbin Amendment will have unintended costly consequences for my constituents and their checking accounts,” he said.