Main Street wins a victory over big banks in the fight to keep debit swipe fee reforms

In a major victory for retailers, grocers and restaurants, the chairman of the U.S. House Financial Services Committee has abandoned his effort to repeal retailer-supported caps on debit card swipe fees as a part of HR10, the Financial CHOICE Act of 2017.

Chairman Jeb Hensarling, R-Texas, says he will offer a manager’s amendment that will remove the one-sentence repeal of the reforms known as the Durbin Amendment from the nearly 600-page overhaul of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.

Once the repeal is removed, retailers nationwide have said they will no longer oppose the financial overhaul sought through the Financial CHOICE Act. HR10 is expected to be on the floor of the U.S. House of Representatives the week of June 5.

Protecting the seven-year-old bipartisan debit-card reform means consumers and Main Street will continue to save $8 billion annually and small merchants will continue to create jobs and boost the economy, the Merchants Payment Coalition said in a statement. The Alabama Retail Association (ARA) is a part of that coalition.

Removing the repeal of the Durbin Amendment from the financial overhaul legislation will be a huge victory for Main Street retailers over big banks,” said ARA President Rick Brown. “Our association and retailers throughout the country will continue our efforts to maintain debit swipe fee reforms. I want to thank the Alabama retailers who reached out to Congress on this issue and ask you to be ready to contact your federal lawmakers again should this issue not be resolved to your satisfaction.”

The 2010 Durbin Amendment and subsequent 2011 rule set a flat fee of 22 cents per transaction plus 0.05 percent of the purchase, or just under a quarter for most debit transactions. Before Durbin, debit swipe fees averaged 45 cents on a typical purchase but could come to several dollars on larger purchases. The fees should have been lowered to 12 cents per transaction, but the big banks encouraged the Federal Reserve to double the amount. The flat fee only applies to the nation’s largest two percent of banks, or those with more than $10 billion in assets. ONE HUNDRED PERCENT of retailers, as well as their employees and customers, benefit from lower swipe fees.

This article is part of the Alabama Retail Report, a communication for Alabama Retail Association members. Not a member? Join us!

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