Oddly, joining Durbin in this anti-consumer legislation is Sen. Will Iraq’s new prime minister bring change - or more of the same? None of this is speculation, as Durbin’s meddling with debit cards demonstrated exactly how banks respond when handcuffed in a competitive market.Ĭongress must not miss the chance to reform the Electoral Count Act The Points Guy, a publication focused exclusively on consumer rewards, states that the Durbin Bill “would be disastrous for consumers, especially those who get immense value from rewards and protections on credit cards…” And to mix in crippling government regulation with hometown cronyism, Durbin’s bill targets Visa and Mastercard but gives a pass to Chicago-based Discover Card.ĭurbin’s proposed interference in the credit card market will wallop consumers in three ways: they will lose rewards and cash-back programs they will face higher annual fees and they will be exposed to the potential of fraud through less-secure networks. As Rossman points out, “merchants won’t admit it, but they pocketed the savings.” The savings for consumers Durbin claims his new legislation will create are wholly illusory, as the same claims were made 12 years ago prior to his sortie on debit cards. Bankrate senior analyst Ted Rossman called Durbin’s new legislation “ very bad” for consumers, as it will eviscerate the $60 billion in annual value they acquire through card benefits. They are the result of market competition in the credit card industry that puts actual financial benefits into consumers’ pockets.Īccording to the International Center for Law and Economics: “the 2010 Durbin Amendment …generated benefits for large-box retailers, imposed substantial net costs on the majority of consumers, especially those from lower-income households.” Economists from Georgetown and the University of Pennsylvania’s business schools found that “banks fully offset losses by charging higher fees.”ĭurbin’s new legislation promises more of the same.
The credit card industry is already highly competitive, with banks attracting customers through innovative products and incentives such as cash back, travel miles, gift-card rewards and numerous other benefits ranging from extended warranties, concert tickets, restaurant and hotel discounts and roadside assistance. These are not benefits consumers receive through paying by cash, or, thanks to Durbin, a debit card. Now, along with his friends in the big-box retailer industry, Durbin is back for round II in his ideological rumble against America’s banks, pushing legislation titled “the Credit Card Competition Act of 2022.” Under the guise of creating “more competition” in credit card exchanges used by merchants, Durbin is primed to rob consumers of credit card benefits just as he did with debit cards.
#Primed vigor free
Banks responded to the loss in exchange fee revenue by raising other rates and fees, eliminating free checking and wiping away nearly all of the benefits and rewards they offered with their branded debit cards. Durbin’s “pro-consumer” legislation wound up costing consumers billions, the loss of perks and benefits and priced millions out of owning a bank account.
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