The Dodd-Frank Act’s so-called “Durbin amendment,” passed more than a decade ago in 2010, was supposed to reduce the cost of consumer goods by regulating the price and processing of debit-card transactions.
In practice, it has instead harmed consumers. Banks offset the income they lost from debit-card fees by increasing fees on checking accounts, increasing the minimum deposit required for “free” checking, and eliminating debit rewards programs. Meanwhile, merchants passed on little of the savings they enjoyed.
But that hasn’t stopped Sen. Richard Durbin (D-Ill.) — author of the original provision — from doubling down, introducing a bill that would impose similar regulations on credit cards. The results are predictable.
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