[Congressional Record (Bound Edition), Volume 157 (2011), Part 4]
[Senate]
[Pages 5236-5237]
[From the U.S. Government Publishing Office, www.gpo.gov]




                         INTERCHANGE FEE REFORM

  Mr. DURBIN. Mr. President, I continue to receive letters weighing in 
on the issue of interchange fee reform. I ask unanimous consent to have 
printed in the Record letters or statements from the following 
organizations: the Rainbow PUSH Coalition, the Main Street Alliance, 
Consumer Federation of America, and the National Black Church 
Initiative.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                    April 1, 2011.
       Dear Senator: The Rainbow PUSH Coalition expresses its 
     views on the Durbin swipe fee reform amendment now being 
     debated in the Congress. Rainbow PUSH is a strong advocate of 
     the Dodd-Frank financial reform legislation which provides 
     critical consumer protections and safeguards against 
     predatory lending.
       The Durbin swipe fee reform amendment should be implemented 
     as scheduled. It will usher in needed reform to bring 
     competition, transparency and choice to the interchange 
     system, and provide incentives for the retail sector to pass 
     on interchange savings to lower the price of products for 
     consumers. Numerous consumer rights organizations, civil 
     rights groups, universities, unions, and other constituencies 
     have weighed in to support swipe fee reform.
       We respect the concerns that some groups have raised about 
     the provision, but are unconvinced that a delay in its 
     implementation as proposed by Sen. Tester and the American 
     Banking Association (representing the financial services 
     industry) will be beneficial to consumers and students, and 
     small businesses. It appears that their interest is to 
     maintain a deregulated environment to continue the virtual 
     monopoly status of the credit card transaction process, and 
     to protect their massive profits derived from debit 
     interchange fees.
       Deregulation, greed and lack of congressional oversight led 
     to the most severe economic collapse since the great 
     depression. But Wall Street got billions in public funds 
     because they were deemed too big to fail--they've been bailed 
     out and are once again recording record profits and issuing 
     millions in executive bonuses, while homeowners and working 
     families are still left out. The big banks are already 
     charging consumers higher interest rates and raising consumer 
     fees to record levels in virtually every dimension of banking 
     and credit card use. We stand ready to meet with all 
     concerned to ensure the implementation of a sustainable debit 
     card system going forward.
       The Durbin credit card swipe fee amendment will afford the 
     protections and regulations that consumers need.
           Sincerely,

                               Reverend Jesse L. Jackson, Sr.,

                                            President and Founder,
     Rainbow PUSH Coalition.
                                  ____

                                                   March 31, 2011.
     Senator Dick Durbin,
     Assistant Majority Leader, Hart Senate Bldg., Washington, DC.
       Dear Senator Durbin: We write to express the National Black 
     Church Initiative's continued support for the Durbin swipe 
     fee amendment which we supported and was included in the 
     Dodd-Frank Wall Street Reform and Consumer Protection Act. 
     The current interchange system is uncompetitive, non-
     transparent and harmful to consumers. It is simply unjust to 
     require less affluent Americans who do not participate in or 
     benefit from the payment card or banking system to pay for 
     excessive debit interchange fees that are passed through to 
     the costs of goods and services. As a result, NBCI does not 
     support Congressional delay of implementation of the new law.
       As you may know, The National Black Church Initiative 
     (NBCI) is a faith-based coalition of 34,000 churches 
     comprised of 15 denominations and 15.7 million African 
     Americans committed to eradicating racial disparities and 
     improving the lives of African Americans nationwide.
       We oppose efforts to delay implementation of the Durbin 
     amendment through Congressional action. The new law gives the 
     Federal Reserve adequate authority it can use without delay 
     to make sure that the debit interchange reimbursement 
     financial institutions receive covers their legitimate, 
     incremental costs for providing debit card services. We know 
     that there are banks, like BB&T for example, who would like 
     to delay this process. Their continued profit off the backs 
     of low income African Americans will no longer be tolerated 
     and we will continue to advocate on behalf of laws that 
     support our agenda.
       From a consumer point of view, the current interchange 
     system is not defensible. Feeble competition in the payment 
     card marketplace has led to unjustifiably high debit 
     interchange fees that the poorest Americans, generally cash 
     customers, are required to subsidize at the store and at the 
     pump.
       Thank you for your consideration of our views. Please 
     contact us directly to discuss these important issues.
           Sincerely,
                                               Rev. Anthony Evans,
     President, National Black Church Initiative.
                                  ____

                                                   March 31, 2011.
     To: U.S. Senators and Representatives.
     Re Main Street Alliance support for implementing debit 
         interchange protections for small businesses in the 
         Restoring American Financial Stability Act of 2010.
       Dear Senator Durbin: The Main Street Alliance, a national 
     network of small business coalitions representing small 
     business owners across America, writes to express our strong 
     support for the provision of the Restoring American Financial 
     Stability Act of 2010 that set out to ensure that debit card 
     interchange fees are reasonable and proportional. This 
     provision is an important step toward putting small 
     businesses back on stable footing by limiting burdensome fees 
     on small businesses when we process debit transactions.
       Small businesses have faced ever-rising fees on debit card 
     transactions over the years. For some businesses, these 
     interchange fees have grown to the point that they represent 
     some of the highest operating costs, rivaling the costs of 
     labor and utilities. There is no such thing as fair 
     competition in this market: the card companies have a 
     duopoly. Limiting fees to twelve cents per transaction, as 
     proposed in new rules, will free small businesses from 
     disproportionate and burdensome costs, allowing economic 
     growth.
       The new rules are a step forward, a step toward parity and 
     a reasonable balance. We ask that these rules not be delayed 
     further. Implementing them as planned this summer will 
     provide a shot in the arm for small businesses and our local 
     economies. Small businesses are better off with these 
     protections; we urge you not to allow the lobbying tactics of 
     the big banks deter the enactment of rules that protect small 
     business.
       The country is counting on small businesses to serve as an 
     engine of economic recovery and create the jobs we need to 
     get people back to work across America. The debit interchange 
     provisions enacted in the financial overhaul last year and 
     codified in the new rules support these aims. We urge you to 
     fight efforts to delay or derail the implementation of these 
     rules.
         Mike Craighill, Soup and Such, Billings, MT; Garry Owen 
           Ault, All Makes Vacuum, Boise, ID; Nancie Koerber, 
           Champions Real Time Training, Central Point, OR; David 
           Borris, Hel's Kitchen Catering, Northbrook, IL; Carson 
           Lynch, Gorham Grind, Gorham, ME; Tammy Rostov, Rostov's 
           Coffee & Tea, Richmond, VA.
         Kelly Conklin, Foley-Waite Associates, Bloomfield, NJ; 
           Melanie Collins, Melanie's Home Childcare, Falmouth, 
           ME; Rashonda Young, Alpha Express, Inc., Waterloo, IA; 
           Jose Gozalez, Tu Casa Real Estate, Salem, OR; Rosario 
           Reyes, Las Americas Business Center, Lynnwood, WA.
                                  ____



                               Consumer Federation of America,

                                                   Washington, DC.

     Position of the Consumer Federation of America on Debit Card 
               ``Interchange'' Fee Legislation and Rules


   no position on debit interchange law or on legislation to delay it

       CFA did not take a position on the ``Durbin Amendment'' to 
     the Dodd-Frank Wall Street Reform and Consumer Protection Act 
     and has also not supported or opposed legislation introduced 
     in Congress to delay the interchange law.


     federal reserve should alter proposed rule implementing debit 
                            interchange law

       CFA filed comments with the Federal Reserve in February 
     (http://www.consumerfed.org/pdfs/debit-cards-FRB-interchange-
rule-comments-2-22-11.pdf) that came to the following 
     conclusions:
       The current interchange system is uncompetitive, non-
     transparent and harmful to consumers. Feeble competition in 
     the payment card marketplace has led to unjustifiably high 
     debit interchange fees that the poorest Americans are 
     required to subsidize. It is simply unjust to require less 
     affluent Americans who do not participate in or benefit from 
     the payment card system to pay excessive fees that are passed 
     through to the cost of goods and services.
       The Federal Reserve should ensure that financial 
     institutions are reimbursed for legitimate, incremental debit 
     card costs as it finalizes rules that implement the new 
     interchange requirements. In particular, the Federal Reserve 
     should increase proposed interchange price standards as 
     allowed under law to include several specific expenses 
     incurred by financial institutions when processing debit card 
     transactions. If such compensation does not occur, these 
     institutions could increase debit card and other related 
     banking charges on their least desirable and most financially 
     vulnerable consumers: low-to- moderate income account 
     holders.
       Once it is implemented, the Federal Reserve should pay 
     close attention to how it affects the financial viability of 
     small depository institutions, especially credit unions, 
     which often provide safe, lower-cost financial services to 
     millions of Americans.

[[Page 5237]]

       The Federal Reserve should launch a broad, balanced study 
     upon implementation of the effects of the rule on consumers.

                          ____________________