ICLE on the Durbin Amendment

Daily Torch View Original Source

Daily Torch – ICLE research on payment markets and the effects of the Durbin amendment was cited in an op-ed in the Daily Torch by Rick Manning of Americans for Limited Government. You can read full piece here.

In fact, a 2017 study by the International Center for Law and Economics (ICLE), found that big box stores like Target were the big winners from the Durbin debit card processing fees amendment, and main street stores along with lower income consumers were the losers.

And a previous 2014 analysis by ICLE also found that “although the Durbin Amendment had generated benefits for large box retailers, it had harmed many other merchants, especially those specializing in small-ticket items, and imposed substantial net costs on the majority of consumers, especially those from lower-income households.”

The 2017 ICLE study also found “… that the passage of time has not ameliorated the harm to bank customers from the Durbin Amendment; to the contrary, earlier adverse trends have solidified or worsened. Nor do we find any indication that matters have improved for small merchants or retail consumers: Although large merchants continue to reap a Durbin Amendment windfall, there remains no evidence that small merchants have realized any cost savings — indeed, many have suffered cost increases. Nor is there any evidence that merchants have lowered prices for retail consumers; for many small-ticket items, in fact, prices have been driven up. Finally, we identify a new trend that was not apparent when we examined the data three years ago: Contrary to our findings then, the two-tier system of interchange fee regulation (which exempts issuing banks with under $10 billion in assets) no longer appears to be protecting smaller banks from the Durbin Amendment’s adverse effects.”