Bank/Thrift Supervision   |    Capital    |    CFPB    |    Deposit Insurance    |    Interchange    |    Mortgage Finance
Municipal Advisors   |    OCC-OTS Merger   |    Preemption    |    QM - QRM    |    Swaps   |    Volcker Rule    |    Full Topics List
Qualified Mortgage - Qualified Residential Mortgage
Consumer Financial Protection Bureau - CFPB
Bank/Thrift Holding Company Supervision
Deposit Insurance
Mortgage Finance
Municipal Advisors
OCC-OTS Merger
Volcker Rule
Corporate Governance
Financial Stability Oversight Council (FSOC)
Office of Financial Research (OFR)
Systemic Risk
Supervision and Oversight
Payment, Clearing and Settlement
Prudential Supervision
Trust & Securities
Asset-Backed Securities
Resolution Authority

Wednesday, May 2, 2012

ABA: Too Soon to Determine Durbin Amendment’s Consequences

ABA president and CEO Frank Keating released a statement in response to the Federal Reserve’s comparative information on the average debit card interchange fee by payment card network research released yesterday.
Due to the Durbin Amendment’s phased implementation, it’s impossible for this initial report to fully reflect or predict the consequences of upending the marketplace with government price controls. It’s just too soon to tell. While it’s too early to see the Durbin Amendment’s full effect on community banks, its impact on consumers and small businesses has never been more apparent.

While retailers pocket $7 billion annually from lower interchange costs, their customers pay higher fees as institutions adjust to government-imposed losses in revenue. At the same time, many small businesses now face higher interchange rates for low-dollar transactions, a classic example of strange things that occur when government creates unnatural pressures to make up for lost revenue. The Durbin Amendment’s primary beneficiaries continue to be big-box retailers who want to reap the benefits of our nation's payments system without paying for it or passing along their savings to customers as promised.

ABA firmly believes the Durbin Amendment’s small-bank exemption can’t work long-term. No legislation can exempt community banks from market forces, and having two prices for the exact same product is simply not sustainable in a competitive system.

No comments:

Post a Comment

Please read our comment policy before making a comment.