Senator Durbin is not one to shy away from an issue, and he has been a strong defender of his amendment directing the Federal Reserve to regulate debit card interchange. Case in point, his recent letter to the ABA, which is much like the letter he wrote to the card networks during the first commentary period. Here is an excerpt from his most recent letter:
“Your February 8 letter reiterating your opposition to reform of the debit interchange fee system makes a number of claims that are off base,” Durbin wrote. “You say that ‘The Durbin amendment…directs the Federal Reserve to set price controls on debit card interchange transactions.’ This is incorrect. You say that my amendment will provide ‘no real benefit to the consumer.’ However, my amendment was supported by consumer groups and millions of individual consumers who signed petitions in support of swipe fee reform. And you say that the Fed’s proposed rule ‘will cause severe harm’ to community banks despite the exemption for small banks and credit unions. Neutral observers disagree. After years of considering the issue, Congress has now recognized that interchange reform is necessary and has passed a reform law that should be given time to work.”
This is a particularly sensitive period for the Dodd Frank Bill (which contains the Durbin Amendment), as both the House and the Senate are holding hearings this week to debate its various components. On Thursday, February 17th, it will be the Durbin Amendment that is on display during the House Financial Services Committee hearing regarding this statute. Senator Durbin has made his position clear.
