WASHINGTON--(BUSINESS WIRE)--The Electronic Payments Coalition (EPC) applauds House Financial Services Committee (HFSC) Chairman Jeb Hensarling and Reps. Blaine Luetkemeyer (R-MO) and Ted Budd (R-NC) for speaking out today on the House floor in defense of the consumers, small businesses, credit unions, and community banks harmed by the Durbin amendment. Although repeal of the Durbin amendment was removed from the CHOICE Act, these leaders stressed the importance of ending this failed policy.
“As Chairman Hensarling, Reps. Luetkemeyer and Budd stated, price controls have no place in government policy, as they go against free market principles and always end up hurting consumers,” said Molly Wilkinson, executive director of EPC. “For six years too long, the Durbin price controls have allowed big box retailers to pocket $42 billion at the expense of consumers, small businesses, community banks, and credit unions. We appreciate their leadership in the fight to end this merchant markup and urge Congress to support efforts to repeal this policy.”
Today on the House floor, Chairman Hensarling declared that, “When government fixes market prices, consumer welfare suffers. It’s not a surprise that the Durbin amendment resulted in a net loss of perhaps $25 billion for consumers … I remain hopeful Congress will correct this mistake, and I will work towards that goal in the future.” Led by Chairman Hensarling, two separate Congresses have taken action in the past year to repeal the Durbin amendment. In September 2016, the 114th Congress’s HFSC passed the CHOICE Act of 2016, which included Durbin amendment repeal. In May, the HFSC of the 115th Congress voted once again to end the provision as part of CHOICE 2.0.
Rep. Luetkemeyer also reiterated support for the repeal of the Durbin amendment, explaining that “Congress should not be in the business of price fixing. Price controls will never work and will always have negative consequences. I’m committed to returning to free market principles that deliver real results for consumers.” In addition to serving on the HFSC, Rep. Luetkemeyer is also the Chairman of the Subcommittee on Financial Institutions and Consumer Credit, as well as the Vice Chair on the House Small Business Committee. As a former community banker and small businessman, Rep. Luetkemeyer has long been an advocate for these institutions which contribute to economic growth.
Also on the House floor today, Rep. Budd explained the Durbin amendment has hurt low-income consumers and that those “who campaigned on a platform of free markets and limited government” should stand by their principles and support repeal. A freshman congressman, Rep. Budd grew up in a family business and now owns a small business in North Carolina. After being assigned to HFSC in January, he announced his commitment to promoting “free market principles [and] entrepreneurial spirit.” He has spoken out against the Durbin amendment multiple times for allowing the government to intervene in the free market.
According the International Center for Law & Economics, the Durbin amendment and its disastrous outcomes have particularly hurt low-income consumers, who rely on free checking and other banking services, as well as small businesses. In fact, a report by Javelin Strategy & Research showed that small merchants care more about value, rather than cost, when it comes to debit card transactions and fees, underscoring the importance of a competitive free market system.
“Multiple studies confirm the Durbin amendment has failed to benefit anyone but big box stores, who have not passed along savings to consumers as promised, while retailers continue to peddle the same misleading study in order to protect this special interest handout,” said Wilkinson. “We look forward to working with Congress to repeal the Durbin amendment and bring needed relief to consumers.”
To learn more about the Durbin amendment’s failures, click here.
About the Electronic Payments Coalition
The Electronic Payments Coalition (EPC) is a coalition of payments industry stakeholders, such as credit unions, community banks, trade associations, payment card networks and banks that speaks on behalf of the payments industry to protect the value, innovation, convenience, security and competition that exists in the modern electronic payments system. The EPC educates policymakers, consumers and the media on the system’s role in economic growth and the importance of consumer choice, security, innovation and stability for the continued growth of global commerce.