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Senators Introduce Legislation Expanding Durbin Amendment

Senators Introduce Legislation Expanding Durbin Amendment

Posted: Aug 03 2022
Last week, Senators Dick Durbin (D-IL) and Roger Marshall (R-KS) introduced legislation effectively expanding the deeply flawed Durbin amendment to credit cards.  Introduction of the measure comes after merchant groups and big box retailers increased their lobbying on the issue earlier this year.

Specifically, the NDBA-opposed bill requires certain credit card issuers to add a second network to their customers’ cards.  The Federal Reserve would be charged with developing a list of options, which is more intrusive than the current rules in place for debit card transactions under the Dodd-Frank Act’s Durbin Amendment in 2010, where a bank could choose any two unaffiliated networks.  The bill also includes a requirement that banks accept virtually any kind of transaction, functionally requiring banks to onboard potentially many more than two networks.  Research by the Fed and others has shown that the Durbin amendment has not led to any cost savings for consumers while having a negative effect on banks under $10 billion.

A broad coalition of banking and financial industry groups, including the ABA and ICBA issued a statement condemning the new legislation, stating that the new mandates would fall “disproportionately” on small card issuers, including community banks.   The groups’ statement also notes that, “The proposed legislation is a clear attempt to secure yet another windfall for the largest multinational retailers and e-commerce giants at the expense of the security of the payments ecosystem and the financial health of everyday Americans.”

To view the industry statement, visit:

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