Trade associations representing nearly every bank and credit union in the U.S. wrote to members of the House Financial Services Committee on Monday expressing their strong support for a provision in the Financial Choice Act that would repeal the Durbin Amendment. Section 335 of the bill would roll back the controversial amendment, which the associations said has led to the erosion of fee-free banking services, increased costs for banks to deliver products and services to their customers and increased the number of unbanked consumers.
“The Durbin Amendment was tacked onto the Dodd-Frank Act at the last minute… without any hearings or analysis, and was sold on the promise of delivering lower prices to consumers. A so-called exemption was supposed to ‘protect’ small community banks and credit unions from the law’s harmful price controls,” the groups wrote. “The Durbin Amendment has not delivered on any of these promises, providing benefits only to retailers, and must be repealed.”
In addition to driving up the cost of banking services, the groups pointed out that the Durbin Amendment has also slowed innovation, presenting “one of the leading obstacles to the development of a low-cost, highly functional mobile banking platform that could provide not only essential financial services for millions of low-income and young consumers, but also their first step toward full financial inclusion.”
The Financial Choice Act, which passed the House Financial Services Committee on Tuesday, includes a provision to repeal the Durbin Amendment.
Read the letter.
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