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Understanding the Durbin Amendment

Understanding the Durbin Amendment Big retail versus big banks, Democrat versus Democrat, debit rewards versus debit fees.a little amendment generates a big controversy. The folks involved Congress Federal Reserve Wall Street NULD 2010 B.D (Before Durbin) July 21st Dodd-Frank is signed into law Visa and MasterCard domi- nate the credit card net- works, and can more or less dictate prices. Banks get a cut of interchange revenues and pass some of it along to consumers in the form of rewards. » Sweeping financial reform bill passed along party lines October 12th TCF Bank challenges Durbin in court » Includes Durbin Amend- ment, which tells the Fed to cap debit swipe fees » No one really noticed the amendment » The statute makes no more sense than regulating the price of a Burger King hamburger solely to the costs of the medt and the bun" - TCF CEO Bill Cooper December 16th Fed makes its first proposal » The Fed considers a 12-cent inter- change fee cap FREE December 17th, - present All-out lobbying assault by retăilers and banks 2011 SENATOR PAST DUE March 15th March 21st Legislative challenge to Durbin Chase ends debit rewards » Sen. Tester (D-MT) introduces a bill April 1st » Fed missed the April deadline of issuing the final interchange regulătion » Reaffirmed that the law would take effect in on » Arquing that Durbin made rewards čhecking unprofitable, Chase says it will end its debit rewards program the day before the rules will take effect. intended to delay the amendment by 2 years » Mudslinging com- » Jaime Dimon: "If you're a res- taurant and you can't charge for the soda, you're going to charge more for the burger." mences July 21st as planned (it inevitably does not) April 8th Chase un-ends debit rewards program » Chase announces it will revive its debit re- wards, contingent on the Durbin Amend- ment belng delayed June 29 » Finally. Fed issues interchange guidelines. » Interchange will average up to 24 cents per transaction, down a bit less'than 50% from the old 42 average, but nearly twice the originally suggested 12 » Retailers contend that the Fed caved to pressure June 8th Tester's bill falls short June 9th » Passes with 54 votes, but fails to reach the 60 needed to overcome a fili- buster Tester consoles him- self with $80k in cam- paign contributions from Wall Street » Banks say that they still can't cover fraud 'costs » Oh, and prepaid debit cards are exempt from the cap POP! LANE ENDS MERSE July 1st TCF drops its suit against' Durbin » Didn't think watered-down regulations were thắt big a deal » Besides, they were out of búrger metaphors October 1st Most provisions go into effect » Fee cap: 21 cents + possible 1 cent + 6.05% of transaction 2012 April 1st Network exclusiv- ity goes into effect for issuers » Card networks must allow cards to be pro- cessed on at least two net- works, and can't stop merchants from using other networks » Visa thanks Fed for excluding prepaid debit card by raising some prepaid interchange rătes 2013 April 1st Network exclusivity goes into effect for prepaid debit and benefit cards July 19th » Chase ends re- wards checking. for reals this time

Understanding the Durbin Amendment

shared by judithgold on Dec 28
When Durbin announced plans to add a new amendment that would put restrictions on credit card companies, a lot of people in Congress began to point fingers. This infographic explains what the Durbin a...


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