Why Americans must tell Congress to keep debit swipe fees in check

Earlier this month, the House Financial Services Committee reported out H.R. 5983, the Financial CHOICE Act, which would roll back most of Dodd-Frank, legislation passed in 2010 to rein in bad actors after the Wall Street crisis of ’08-’09. Unfortunately, a key reform that protects competition and saves consumers and retailers at least $6 billion per year got swept up in the process.

Despite long-standing partisan bickering over Dodd-Frank, the so-called Durbin Amendment has always enjoyed strong, bipartisan support. Promoting competition in the payments processing market has encouraged greater payment security and reduced exorbitant debit swipe fees levied against retailers and consumers by the big banks.

Swipe fee reform has proven highly effective at reducing prices for consumers, lowering costs to retailers and creating jobs across America. So how could a measure with bipartisan support in Congress — not to mention 89 percent support from consumers — be in danger of repeal?

The simple answer is most lawmakers aren’t aware that the Durbin Amendment baby is getting tossed out with the Dodd-Frank bathwater. The more complicated answer is that the big banks are at it again, trying to manipulate the political process to pad their bottom lines at the expense of middle-class consumers and Main Street businesses. 

Repealing this important legislation would end competition and transparency in the payments processing market, resulting in a doubling of debit swipe fees overnight. The big banks would once again be able to fix prices, eliminate market choices and pick the pockets of consumers through extortive fees. The result: Higher prices for consumers, higher costs for businesses and a slower economy for America.

Even with the Durbin Amendment in place, retailers and our customers still fork out over $50 billion a year in swipe fees to the big banks. For some businesses, swipe fees are their highest paid employee. With Wall Street flying high and Main Street still suffering, it makes no economic or political sense to transfer another $6 billion a year from consumers and retailers to the big banks.

Dodd-Frank has some problems, but the Durbin Amendment isn’t one of them. Whatever good might come from the Financial CHOICE Act would be undone if Congress kills competition and allows big banks to sock it to American consumers.

Retailers compete. It’s tough. Competition keeps us on our toes, but when competitive markets work, everyone benefits. That’s why we’ve spent years fighting to bring competition to payment cards. We urged the enactment of the Durbin Amendment in 2010 and fought to keep it in place in 2011 — and we aren’t going to stop now. That’s why we’re calling on our nationwide network of businesses of all sizes — as well as millions of consumers — to contact their member of Congress and let them know that debit swipe fee reform must stand!

As the November elections approach, retailers and consumers will have more and more opportunities to make their voices heard. We need ALL of our members to get in touch with their representatives. Show up at town halls and candidate forums. Ask them if they support lower prices for consumers and merchants — or if they favor higher profits for big banks.

In Washington, D.C., NRF is working to educate lawmakers on the dangers of passing the Financial CHOICE Act without preserving debit swipe fee reforms. We are meeting with members of Congress and key congressional staff, urging them to stand with American consumers and retailers, not the big banks.

If we can make lawmakers understand the devastating impact of repealing debit swipe fee reform, we are confident they will change course. But we all need to work together to make our voices heard.