NATSO, Merchants Coalition Oppose Repeal of Debit Reforms

NATSO joined more than 160 national and state trade associations representing retailers and employers, in voicing strong opposition to H.R. 5465 and language in the CHOICE ACT that would repeal the debit reforms in the 2010 financial services reform legislation known as the Durbin Amendment.

In recent weeks, several prominent Members of Congress have called for repealing the Durbin Amendment. This "would result in skyrocketing debit fees for travel plazas and truckstops and higher prices for consumers," according to David Fialkov, NATSO's Vice President of Government Affairs.
In a letter sent to Speaker Paul Ryan (R-Wisc.) and House Minority Leader Nancy Pelosi (D-Calif.), the members of the Merchants Payments Coalition, of which NATSO is an active member, said that the Durbin Amendment brought competition and transparency into a market that was historically void of it and that weakening the law will benefit the banks while removing all competition from the debit routing market.

“The reforms in the law have benefitted American consumers, merchants, small financial institutions, and the economy as a whole,” the groups wrote. “Repealing or weakening the law will only benefit fewer than two percent of the country’s largest banks and remove any and all competition from the debit routing market.”

The Durbin Amendment of the Dodd-Frank Wall Street Reform required the Federal Reserve to issue rules ensuring debit card interchange rates are reasonable and proportional to the costs incurred. Effective Oct. 1, 2011, the maximum fees that retailers had to pay on all PIN and swiped debit card transactions changed to 24 cents.

The Federal Reserve Board set the per-transaction cap at 21 cents and also allowed for an additional charge of 0.01 cent to cover fraud as well as .05 percent of the sales amount. The new interchange fees can be charged for all debit transactions on card issuers with more than $10 billion in assets. Issuers with fewer than $10 billion in assets are not subject to the Durbin Amendment.

Consumers have saved nearly $30 billion since the reforms have been in place and merchants have saved more than $10 billion, permitting them to reinvest in their businesses, spurring job creation and economic activity.

A federal appeals court on June 30 threw out a $7.25 billion antitrust settlement that Visa and MasterCard had reached with millions of retailers over the high swipe fees that retailers pay each time a customer uses a credit card. The court ruled that it was unfair to retailers who stood to receive no payments and little or no benefit. 

This marked a major victory for retailers and NATSO, who was one of the original plaintiffs in the case. "This decision marks a major victory for retailers who have been seeking reform to the broken credit card system that costs them billions of dollars each year,” NATSO President and CEO Lisa Mullings said the day of the ruling. “Had it moved forward, this settlement would have allowed Visa and MasterCard to continue to set artificially high swipe fees and allowed them to potentially increase those fees in the future to recoup the settlement costs. Our hope is that this ruling will open the door to the possibility of real reform that will allow true competition and transparency in the credit card system."

NATSO opposes the current misguided attempts to repeal the debit reforms that have benefited so many and will continue to actively oppose any efforts to repeal or weaken the law. 

Shannon Meade's photo

Shannon Meade

Shannon Meade implements NATSO's legislative and political agenda in Washington, D.C. She also directs NATSO's political engagement efforts.
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