According to the Nashville Business Journal, U.S. Sen. Dick Durbin yesterday defended his legislation limiting interchange fees during a press conference in Nashville, Tenn.
The Durbin Amendment, a component of the Dodd-Frank Wall Street Reform and Consumer Protection Act, applies an interchange fee cap of 21 cents per debit transaction, along with five basis points to be multiplied by the value of the transaction. Issuers can also receive an additional 1-cent per transaction toward the costs of fraud prevention.
Durbin, D-Ill., spoke alongside U.S. Rep. Jim Cooper, D-Nashville, telling reporters that consumers will see economic benefits as the regulations take root.
“The retailer will be more profitable,” Durbin said. “That’s what’s behind this.”
Proponents of the Amendment have said that the savings retailers will experience as a result of the interchange fee caps will be passed on to consumers, however, banks have expressed skepticism at this claim.
According to the article, the revenue hit to banks is forcing them to search for new income, causing several to eliminate free checking and rewards offers, among other things.
Implementation of the Amendment is slated to go into effect on Oct. 1.
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