"Durbin 2.0" Routing Mandate Would Harm Taxpayers and the U.S. Financial System

Today, the National Taxpayers Union voiced its strong opposition to Senator Durbin and Senator Marshall’s proposed bill to institute routing mandates on credit cards, warning of its adverse consequences for consumers, taxpayers, and the strength of the U.S. financial system. NTU President Pete Sepp offered the following statement.

"Price controls are always out of place in a free market economy, but the legislation introduced today comes at the worst possible time. If approved, the proposal will have negative impacts on everyday Americans across the country. Instead of reducing costs for consumers, banks will be forced to modify their business models to make up for these price controls, likely by reducing credit card rewards, increasing existing fees, or forming new fees. This would produce the exact opposite effect of the bill's desired outcome. 

The mandates could also have the effect of dissuading merchants from advanced payments networks and toward less secure, and less reliable alternatives. This could result in user data being at risk due to diminished cybersecurity for electronic payments with unproven services, putting the financial stability of Americans at greater peril during historically high inflationary times.

‘Durbin 2.0’ is an overbearing solution in search of a nonexistent problem. Congress should refrain from picking winners and losers and instead focus on fostering a free market approach to these credit card fees. The market can determine far better the costs of a secure payment network and the benefits consumers want. Here's hoping this bill doesn't advance any further in the legislative process."

NTU was an early and vocal opponent of the first 'Durbin Amendment' aimed at debit cards, outlining several consumer and taxpayer interests in the issues surrounding interchange and routing. For further details visit ntu.org.