‘Durbin fee’ will cost bank customers billions

Published October 2, 2011 4:00am ET



After Sen. Dick Durbin, D-Ill., successfully added his “swipe fee” amendment to last year’s Dodd-Frank financial regulation bill, he promised, “By requiring debit card fees to be reasonable … small businesses and their customers will be able to keep more of their own money.” That was the theory, at least.

Durbin pitched his amendment, which empowered federal bureaucrats to fix the fees banks can charge merchants for each debit card transaction at 24 cents, as a blow to the “excess profits” of “big banks.” Banks currently charge an average of just 44 cents per transaction, but for big retailers like Wal-Mart, all those transactions can add up. Analysts estimate that the Durbin amendment will be a $6.6 billion boon for the Targets and Walgreens of the world.

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