A regulation capping fees on debit card transactions has enriched retailers without benefiting consumers, a new study from a banking industry group finds.
A group representing credit unions, banks and payment card networks marked the third anniversary of the so-called “Durbin Amendment,” a provision of the 2010 Dodd-Frank financial reform law that capped fees on debit card transactions, known as “swipe fees,” by publishing a study that says the rule has not lowered prices for consumers.
The group, the Electronic Payments Coalition, presented research it commissioned finding that 94 percent of consumers have not seen price declines, which the coalition argues contradicts the claims of retailers who supported the Durbin Amendment.
That finding would have been expected, giving that consumer prices have risen at between 1 and 2 percent annually since the rule went into effect. The study, however, also found that 16 percent of consumers reported that some retailers are imposing surcharges on debit card purchases.
“When Congress interferes in a fight between two industries over who pays what, it is almost always consumers who lose,” said Camden R. Fine, president and CEO of the Independent Community Bankers of America, announcing the survey of 3,400 consumers performed for the group by Phoenix Marketing International.
The Durbin Amendment was the subject of intense lobbying between retailers and banks between the 2010 passage of the Dodd-Frank law and when the Federal Reserve finalized the rule in 2011. Although banks were successful in getting the Fed’s proposed cap raised before it went into effect, the rule ended up reducing the average swipe fee for covered banks by more than 50 percent, from 50 cents to 24 cents per transaction, according to a study published in June.
The Electronic Payments Coalition charged that the rule has resulted in savings $24 billion for retailers, without benefiting consumers.
