U.S. Rep. Jeb Hensarling (R-Texas) on Sept. 9 introduced legislation, titled “the Financial CHOICE Act,” that seeks to repeal debit card swipe fee reform, commonly known as the “Durbin Amendment.”
As Chairman of the House Financial Services Committee, Congressman Hensarling is fast-tracking this legislation by scheduling a vote on the bill in the Committee as early as Sept. 12.
Rep. Hensarling’s bill is intended as the Republican alternative to the 2010 Dodd-Frank Wall Street Reform Act – an effort to showcase Republican policy priorities before the November elections. Although the bill is unlikely to become law this year, it does set a marker for future financial reform legislation that could be considered in the next congressional cycle.
The Durbin Amendment – which imposed much-needed reforms on the debit interchange market – brought certainty for retailers and a level of transparency and competition into a market that was historically void of it.
Debit card reforms have been a major step in the right direction and any removal of those reforms would be a monumental step in the wrong direction for U.S. businesses and consumers.
Repeal of the Durbin Amendment would allow the big banks to impose outrageous fees on merchants and increase prices for consumers. Companies like Visa and MasterCard will dominate the market to the extent that they can fix fees, squeezing retailers and raising costs for consumers. It is currently estimated that swipe fees cost merchants and consumers $40 billion every year.
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