CEI financial policy expert Iain Murray criticized the House for stripping out repeal of the Durbin amendment yesterday from the Financial CHOICE Act.
The House Republicans’ capitulation on Durbin repeal is a slap in the face for lower-income Americans. All the evidence suggests the cap on debit card interchange fees resulted in a windfall for retailers who failed to pass on savings to consumers. In fact, many of those consumers were hit by higher bank fees as banks sought to replace the lost income stream from processing debit card transactions. The result has been a net loss of around $25 billion a year for American consumers, most of it born by low-income households. The House had a chance to right this wrong, and they blew it.
It is doubly outrageous that the House GOP has decided price controls are acceptable in what is supposed to be a free economy. Politicians and bureaucrats have no business setting acceptable prices for any good or service. Such practices always stifle innovation and reward special interests. The costs to combat security threats to the payment card system are increasing, and big retailers must pay their share.
Related commentary: The GOP must fight against the Durbin amendment’s price controls, by John Berlau for The Hill