survey data released by Morning Consult shows that a majority of
consumers support repeal of the merchant markup, also known as the
Durbin Amendment of the Dodd-Frank Act.
Retailers have pocketed $36 billion from the Durbin Amendment, turning
it into nothing more than a merchant markup that pads retailers’ bottom
lines. More than five years later, consumers are saying enough is enough.
More than six in ten consumers think the Durbin Amendment should be
repealed if merchants are not passing the savings on to consumers. A study
by the Federal Reserve confirms that merchants are not handing over the
savings they receive from the Durbin Amendment. Instead they are
pocketing six to eight billion dollars every year since the regulation
was implemented—all of which should have been passed along to customers
in the form of lower prices.
By a two-to-one margin, consumers think interchange fees should be
negotiated by merchants and processors, not by the federal government.
This same sentiment was even shared by Former Financial Services
Committee Chairman Barney Frank when he reflected on the law after it
passed, “I’m not a fan of the Durbin amendment. I think that’s not going
to help the consumer. That was intervening in a fight between two
economic groups that should be left to their own.”
Not only was Barney Frank right in that consumers would be hurt, the
Durbin Amendment resulted in negative consequences for community banks,
credit unions, and small businesses as well.
The amendment’s price controls have had numerous unintended side
effects, contributing to the loss of consumer benefits like free
checking, increased costs for smaller community financial institutions,
and effectively forcing small retailers to lose important discounts on
debit card transactions.
By the same two-to-one margin, consumers think more government
regulation will stifle innovation.
Instead of simply pocketing interchange revenue like the big box
retailers have done, financial institutions invest in supporting the
global payments network and developing innovative security technologies
that protect consumers’ sensitive financial information.
“It is clearly time to repeal the Durbin Amendment, which is nothing
more than a merchant markup that has served the special interests of big
box retailers for far too long,” said Molly Wilkinson, executive
director of the Electronic Payments Coalition, “Customers are not
benefitting from the price controls on debit interchange transactions
and this new data shows consumers support ending this failed policy.”
to repeal the Durbin Amendment has been introduced by Chairman Jeb
Hensarling of the House Financial Services Committee and by
Representative Randy Neugebauer.
View EPC’s infographic highlighting
Morning Consult conducted a national survey of 1,999 registered
voters from October 13-15, 2016. Results from the survey have a margin
of error of plus or minus two percentage points.
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
Electronic Payments Coalition (EPC)
Kasia Mulligan, 1-(202) 627-0544