Thanks to a regulation from Congress, starting October 1, 2011, retailers began paying a lot less to accept debit cards. And they promised to pass the savings on to you. Three years and $24 billion later the Durbin amendment is still not benefiting consumers.
Retailers promised consumer savings from the Durbin Amendment, but have you seen savings?
What is the Durbin amendment?
The Durbin Amendment, which was added to the Dodd-Frank Act in June 2010, directed the Federal Reserve to cap the amount that merchants pay to accept debit cards – a cost called “interchange.” On July 29, 2011, the Fed finalized the rule, dictating that debit card issuers could only charge up to 24 cents per transaction – a cut of nearly fifty percent from the average free market rate. Meanwhile, despite years of promises about the savings they would pass to consumers, merchants are laughing all the way to the bank. Experts estimate that merchants will save approximately $8 billion in interchange – costs that will ultimately be passed back to the customer.