Open Letter to Financial Services Committee: Repeal Durbin Amendment

On behalf of the supporters of the National Taxpayers Union (NTU), I urge all House Financial Services Committee members to support H.R. 10, the Financial CHOICE Act and to strongly oppose any attempts to modify or strike Section 735, which repeals the Durbin Amendment.

Section 735 of H.R. 10 would repeal one of the most needlessly complicated and unrelated provisions of Dodd-Frank, the Durbin amendment. This policy directed the Federal Reserve to set price controls on debit transactions interchange fees, which are paid by the merchant’s bank to the consumer’s bank. It also placed routing requirements on these debit transactions.  Getting rid of this policy through H.R. 10 would end a handout to large retailers, which have failed to pass along savings to consumers as promised.

Many studies over the years have found this policy has not provided any benefits to consumers, and small businesses—and hasactually caused them harm. A study released last week by the International Center for Law & Economics confirmed that not only have retailers not lowered prices, but consumers have also faced a reduction in free checking, higher banking fees, and the elimination of rewards programs.  Small businesses have also lost out on much needed flexibility, which another recent study by Javelin Strategy & Research found is more important to small merchants than price.

Historically, price controls have never worked and cause more harm than good. This has been true of the Durbin amendment.

Repealing this policy via Section 735 of H.R. 10 and thereby returning to more of a free market will end the handout to big-box retailers and relieve consumers and businesses of government interference. A reduction in government regulations will increase market competition and benefit the financial system.

Again, I strongly urge you to support H.R. 10 and to support Section 735.


Brandon Arnold
Executive Vice President