Removing Barriers Blog

Hensarling Reform Package Includes Repeal of Durbin Amendment
Posted June 08, 2016 by CUNA Advocacy

In his remarks before the Economic Club of New York, in which he laid out a series of reforms to Dodd-Frank, House Financial Services Committee Chairman Jeb Hensarling (R-Texas) stated that the proposal would repeal the federal price controls found in the Durbin Amendment. 

The Durbin Amendment, which was part of the 2010 Dodd-Frank law, requires the Federal Reserve to limit the interchange fees charged to retailers on debit card transactions.  The intent of the amendment was to pass these fee savings back to consumers.  However,  in reality retailers have kept most of the revenue from the price controls, which is now an estimated $36 billion. 

Repeal of the Durbin amendment would bring meaningful relief for credit unions.  According to Business Wire, “… credit unions typically have a far lower number of debit transactions than covered issuers, and consequently are less able to access the economies of scale enjoyed by larger issuers to help absorb costs.” 

In addition to the Durbin repeal, CUNA also supports several other provisions in the Hensarling proposal, including bringing the CFPB under the appropriations process and the Bureau being headed by a five-person commission.  While the reform package is not likely to be enacted this year, we will continue to work with Congress and others in the financial services industry to bring meaningful regulatory reform for credit unions.