Durbin Amendment

Overview

In 2010, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act designed to protect consumers and prevent economic downturns like the Great Recession of 2008.

Crafted by Senator Dick Durbin (D-IL), the Durbin Amendment is an extension within the Dodd-Frank Act, which alters the competitive structure of the debit card payment processing industry and requires the Federal Reserve to cap debit card interchange fees for banks with over $10 billion in assets. 

The legislation was designed to boost economic activity among consumers and small businesses. Unfortunately, the interchange fees established by the Federal Reserve have resulted in more costs than savings to both groups.

A House version of the expansion of the “Durbin Amendment” to credit card products was recently introduced by Peter Welch (D-VT) and Lance Gooden (R-TX). 

A coalition of Texas financial services trade associations sent a joint letter to Congressman Gooden to express strong opposition to the bill. In the letter, the coalition asserts that bill effects will trickle down to all institutions, not just those over $100 billion in assets. It further asserts that the end-result of the bill will be a race to the bottom on credit card payment network security, which will result in additional fraud.