Epstein Argues Durbin Amendment Could Do Permanent Harm to Banking Industry

Dick's Debit Card Dud
Richard A. Epstein
The New York Post
October 5, 2011

As of Oct. 1, the Durbin Amendment to the Dodd-Frank Act cut the permissible fees that the banks that issue debit cards can charge merchants. The “reform” will revolutionize retail banking -- for the worse.

Sen. Richard Durbin and his merchant supporters claimed that the banks were in collusion with the big credit-card companies to charge the merchants extortionate fees. To get the amendment through, it exempted small banks, defined as those with assets of under $10 billion.

Pursuant to the Durbin Amendment, the Federal Reserve Board slashed these fees in half, costing banks in aggregate about $6.6 billion, which they were supposed to make up from direct charges to customers.

Richard A. Epstein