But we shouldn’t lose sight of the fact that the Durbin price caps and the Fed’s interpretation hurt consumers, hand billions of dollars to the biggest merchants, and do absolutely nothing to lower prices.
Washington, DC (PRWEB) March 21, 2014
The Independent Community Bankers of America® (ICBA) expressed satisfaction with a U.S. Circuit Court of Appeals ruling, Case No. 1:11-cv-02075, ruling rejecting major retailers’ efforts to increase the $6 billion annual windfall they secured with the passing of the Durbin debit card price caps.
“Considering what would have happened if the lower court ruling stood, this is a reasonably good result for consumers,” said ICBA Chairman John H. Buhrmaster, president of 1st National Bank of Scotia, N.Y. “But we shouldn’t lose sight of the fact that the Durbin price caps and the Fed’s interpretation hurt consumers, hand billions of dollars to the biggest merchants, and do absolutely nothing to lower prices.”
According to court documents, the merchants, who had initiated a multi-year lobbying effort to impose price controls, sued the Federal Reserve Board in an effort to lower the Board’s caps even further. While arguing that consumers would benefit from lower retail prices, there is no evidence that prices have come down as a result. ICBA and a coalition of trade associations filed a friend-of-the-court brief in opposition and participated in oral arguments, arguing that the Federal Reserve’s existing price caps did not allow card issuers to cover their costs while receiving a reasonable return on their investments.
“Despite the merchants’ promises, there is absolutely zero evidence that they have lowered prices as a result of the massive profits resulting from the Durbin caps,” ICBA President and CEO Camden R. Fine said. “Even more, the merchants are making banking more expensive. The fact is that free checking is harder to find, account maintenance costs have increased, ATM fees have risen and there are few signs that it will get better.”
In addition to ICBA, the coalition includes the Credit Union National Association, National Association of Federal Credit Unions, National Bankers Association, Midsize Bank Coalition of America, Consumer Bankers Association, The Clearing House Association, American Bankers Association and The Financial Services Roundtable.
The Independent Community Bankers of America®, the nation’s voice for nearly 7,000 community banks of all sizes and charter types, is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education and high-quality products and services. For more information, visit http://www.icba.org.