CBA Letter of Support for Neugebauer Durbin Repeal

June 14, 2016


Chairman Randy Neugebauer

Financial Institutions and Consumer Credit Subcommittee

House Financial Services Committee

U.S. House of Representatives

Washington, D.C. 20515


Dear Chairman Neugebauer:


On behalf of the Consumer Bankers Association (CBA), I write to express our strong support for H.R. 5465, a bill to repeal Section 1075 of the Dodd-Frank Act.  CBA is the voice of the retail banking industry whose products and services provide access to credit for consumers and small businesses.  Our members operate in all 50 states, serve more than 150 million Americans, and collectively hold two-thirds of the country’s total depository assets.


H.R. 5465 would repeal a flawed provision of the Dodd-Frank Act directing the Federal Reserve to impose price-controls on debit interchange fees.  Known as the Durbin Amendment for its sponsor, the provision was included during the Senate’s consideration of the financial reform bill and adopted by a conference committee without ever being debated by the committees of jurisdiction or the House of Representatives. 


Flawed policies like the Durbin amendment that pick winners and losers with little consideration of the market impact ultimately harm consumers.  Merchants promised price-controls would allow them to pass along savings—about $8 billion annually—to consumers in the form of lower prices.  Ironically, this call for market intervention came from some of the same merchants who have since demanded the government stay out of business decisions on soft drink sizes and menu offerings.


Unfortunately, evidence demonstrates the Durbin Amendment has resulted in billions of dollars in revenue for merchants and little if any savings for consumers.  A Federal Reserve Bank of Richmond study found that more than three-fourths of merchants surveyed did not change their prices and nearly one in four merchants actually increased prices since the Durbin Amendment took effect.  Four years of consumer research by Phoenix Marketing International (PMI) has reiterated that consumers have not seen the promised savings at the checkout.  To make matters worse, the $8 billion per year merchants are siphoning away has reduced the funding the financial services industry used for low cost banking solutions.  These results clearly demonstrate the unintended consequences of interfering with a functioning market—consumers are hurt the most.


On behalf of all our members, thank you for your leadership on this issue.  CBA welcomes the opportunity to work with you in passing this important legislation. 



Richard Hunt
President and CEO
Consumer Bankers Association