5 APRIL 2011
Washington, D.C., – 33 national and state-level think tanks, advocacy groups, and center-right activists sent a letter to Congress strongly supporting efforts to roll back price controls on debit card interchange fees. The price controls were included in the Durbin Amendment of last year’s Dodd-Frank financial “reform” act and mandate the Federal Reserve to cap the interchange fee paid by merchants for debit card transactions by July.
The letter was signed by a broad spectrum of groups in the center-right coalition – including the Competitive Enterprise Institute, Americans for Tax Reform, the Club for Growth, the Christian Coalition of America, and state groups and activists. In addition, at least one signatory, the 60 Plus Association, plans to score any vote to delay the impact of the rules as one of its “Guardian of Seniors” Key Votes for 2011.
To quote from the letter: “Consumers and seniors on fixed incomes will likely bear the brunt of these regulations directly, as card issuers struggle to cover the cost of artificially low price controls on interchange fees. For card holders, this means higher fees, fewer card rewards, the elimination of banking services such as “free checking,” or otherwise. Simultaneously, banks – and particularly smaller card issuers – will be forced to determine whether offering some consumer services is more costly than it is worthwhile.”
Three signers made the following statements:
John Berlau, Director, Center for Investors & Entrepreneurs, Competitive Enterprise Institute:
“The debit card debacle has focused needed attention on the flaws of Dodd-Frank – which is labeled as ‘Wall Street’ reform but is in reality producing regressive effects for Main Street banks and businesses. Recent bills to repeal Dodd-Frank are a welcome development. But first, we must stop the law's oncoming train wreck that threatens the savings of consumers as well as the safety and soundness of the financial system with price controls that don’t even cover the cost of services to retailers. Only bills such as the bipartisan S. 575 have a realistic shot at avoiding such a train wreck by the Durbin Amendment's implementation deadline of July.”
James Martin, Chairman, 60 Plus Association:
“The Durbin Amendment calls for unprecedented price controls that not only fail to provide any real benefits for seniors and consumers, but also cause real consumer harms. In addition, these price controls harm the community financial institutions that so many seniors rely upon for banking. Seniors on a fixed budget cannot afford the plethora of new fees that these institutions will now be forced to charge, and may lose access to valuable banking services. That is why we are scoring any vote to delay the implementation of this destructive mandate and require a study of the impact on consumers as vital to the interests of seniors.”
Grover Norquist, President, Americans for Tax Reform
“Price controls on debit card fees are just one of many new regulations in Dodd-Frank that will cost – not protect – consumers and taxpayers. While the entire Dodd-Frank law should be scrapped, S. 575 is a bipartisan effort to stall draconian rules that will dramatically alter how consumers use debit cards. If this letter makes one thing clear to Congress, it’s that the broader center-right movement wholeheartedly supports tossing out these price controls.”
John Berlau is available for comment and can be reached at email@example.com or at his cell, (202) 415-3192