‘Durbin Fees’ are coming, thanks to Congress

If we had a “Dim Bulb of the Year” award, we would give it to Sen. Dick Durbin, D-Ill. How better to honor someone who so ostentatiously proposes a policy with obvious unintended consequences, then gets angry when they predictably come to pass?

During the debate over the Dodd-Frank financial reform bill, when Democrats controlled Congress, Durbin insisted on including an amendment that had nothing to do with Dodd-Frank’s stated aims of stable banks and consumer protections. The Durbin Amendment granted regulators the authority to establish price controls on what banks could charge merchants that accepted their customers’ debit cards as payment. The resulting regulations, which took effect Saturday, limit what banks can charge merchants to no more than 24 cents per debit card transaction.

Critics pointed out that banks, facing $6 billion annual losses from this change, would shift the costs of debit cards from merchants to bank customers. Sure enough, Bank of America and several of its largest competitors — including Wells Fargo, PNC, HSBC, SunTrust, TDBank and Chase — will be imposing various new fees on their customers to make up for Durbin’s folly.

Bank of America drew Durbin’s particular ire because its management directly blamed Durbin by name for the new $5 per month charge it is leveling at customers who make purchases with their debit cards.

“Bank of America is trying to find new ways to pad their profits by sticking it to its customers,” Durbin said in a petulant statement released recently. This might almost pass the laugh test, if not for the fact that every bank is adjusting to Durbin’s dumb law in nearly the same way.

It’s not that Durbin couldn’t have seen this coming. Visa, among others, blasted the Durbin amendment at the time, saying that the Senate “adopted [it] with no debate or review of facts.” The company warned that the law would “shift [retailers’] cost for accepting debit cards onto the backs of consumers.”

Durbin shrugged off such warnings, suggesting that those who disagreed with him were motivated by greed and “on the side of Wall Street banks and credit card companies.” He absurdly claimed that the debit card fee cut would help to prevent banks “up on Wall Street” from causing another financial crisis — a non sequitur so completely disingenuous that it can only be called a lie. Durbin acted to help the merchants who pay for the convenience of debit cards. But what he has actually done is made the lives of bank customers more difficult, as they will now be charged more to access their own money.

Every time you pay that extra “Durbin Fee” to use your bank card, remember that this is what happens when “progressives” govern. They undo progress and make ordinary Americans’ lives harder.

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