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Michigan Credit Union League

One Year Later: Consumers Not Benefitting from Durbin Price Control Regulation

At the first anniversary of the implementation of the Durbin amendment, an Electronic Payments Coalition study shows that the law’s new interchange structure has not saved consumers any money, while retailers have pocketed an additional $8 billion.

EPC, which is made up of credit unions and community and regional banks, created a website – – which highlights the study. EPC found that consumer prices have increased 1.5% since Durbin was implemented beginning on Oct. 1, 2011.

“In 2010, Congress handed retailers a gift with the Durbin amendment, a new regulation that put government price controls on debit interchange fees – what retailers pay to accept debit cards at the register,” EPC’s story says. “During testimony, retailers promised they would pass savings along in the form of lower prices to their customers.” 

To collect the data for the field research, EPC made 36 shopping trips at 18 stores nationwide. A consistent list of products was purchased during two separate shopping trips at each store and compared: one in the final week of September 2011 before implementation of the Durbin amendment and one in the final week of September 2012, one year after the implementation of the Durbin amendment. The research shows that 67% of the retailers visited across the country either raised prices or kept them the same.

After implementation, shoppers paid on average:

  • $2.22 (or 6.6%) more for the same items at Home Depot in Atlanta. Despite this retailer’s claims to the contrary, EPC’s shoppers saw price increases at this chain more than any other.
  • 80 cents (or 5.4%) more for the same items at Walmart in Portland, Maine.
  • $1 (or 2.6%) more for the same items at 7-Eleven in Washington.
  • 30 cents (or 2.9%) more for the same items at Walgreens in Boston.

These higher prices for consumers come as retailers save billions and debit card issuers are forced to make up for lost revenue. Consumers are paying more for traditional banking products and services and not even getting any reduction at the register to help ease the pain. 

EPC is hoping that card issuers such as credit unions will help spread the story and explain how the Durbin amendment has hurt consumers.

And just recently, published its annual Checking Survey which found that the costs of checking have risen dramatically, with some bank fees rising 25 percent or more. The survey finds that the rise in fees is, in part, a result of recent regulations limiting overdraft fees and capping the cost of debit card interchange fees.

MCUL & Affiliates CEO David Adams said the survey results were not a surprise.

“This survey proves what we we’ve said all along – that retailers would not pass along any interchange savings to their customers. Retailers are enjoying an $8 billion gift, complements of the Durbin amendment. We urge Congress to go back and reconsider this ill-conceived law.”

Smaller card issuers, including all but four of the country’s credit unions, are exempt from Durbin, but they have seen a decline in interchange income since the law was implemented. A study by the U.S. Government Accountability Office found smaller community banks and credit unions have seen interchange revenue decreases of 5% in the first three months following interchange fee cap implementation. Click here to see the GAO study.

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