In a disappointing development for retailers and consumers alike, the House Financial Services Committee approved legislation Sept. 13 that would, among other things, repeal the debit fee reform legislation known as the Durbin Amendment. It passed on a party-line vote, with all-but-one Republican on the Committee voting for the legislation repealing the Durbin Amendment, and all Democrats voting against it.
The legislation that was passed was a larger, comprehensive financial services reform package designed to roll back a number of the reforms contained in the Wall Street reform bill known as Dodd-Frank. Although most of the bill is targeted at banking regulations that are not directly applicable to NATSO members, the fact that it did include repeal of the Durbin Amendment is a negative development.
As a result of the Durbin Amendment, which became law in 2010, the Federal Reserve has set a limit on the fees that retailers may be charged for debit card processing. It also resulted in much-needed competition into the debit card routing space. It has demonstrably led to more cost-savings for retailers, which has in turn been passed along to consumers via lower prices for products.
Although the legislation is very unlikely to become law this Congress, it is laying the groundwork for financial reform efforts in 2017. For this reason, NATSO is actively lobbying against the legislation.
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