[Congressional Record (Bound Edition), Volume 163 (2017), Part 6]
[House]
[Page 8046]
[From the U.S. Government Publishing Office, www.gpo.gov]




                     REPEALING THE DURBIN AMENDMENT

  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
North Carolina (Mr. Budd) for 5 minutes.
  Mr. BUDD. Mr. Speaker, right now we are having a fierce debate in the 
Republican Conference over the Durbin amendment, which is a price 
control on debit swipe fees. Retailers have claimed that the Durbin 
amendment is about competition. They have claimed that it is about 
restoring a broken market. They have claimed that Visa, MasterCard, and 
issuing banks are engaged in price-fixing on swipe fees.
  This is a key element of this debate. A vote to keep the Durbin 
amendment is a vote that rests on the idea that Members are sure that 
there is price-fixing in the debit card market. There is $6 billion to 
$8 billion per year at play here, and the violation of a core free-
market principle, which is the notion that government should not be 
telling people what they can or can't charge.
  My point would be that, if you do that, if you support that degree of 
command and control in the economy, you have got to be sure.
  And should we be sure?
  I go back to the Sherman Antitrust Act, which outlaws price-fixing. 
This is a criminal law. Hundreds of people have been put in jail for 
it. You can go to jail for up to 10 years for violating it, and the law 
has stood for more than 100 years.
  Payment networks and retailers have been fighting over whether or not 
Visa, MasterCard, and issuing banks are violators of the Sherman 
Antitrust Act for 30 years. And one of the earlier rulings goes back to 
1986.
  There is ongoing litigation now. In fact, there are more than 15 
different cases out there on this. Litigation, I would add, that the 
retailers have never won when cases went to trial. In the major cases 
that we have managed to find, they are 0-3.
  They are actually in the middle of another big case right now. There 
was a settlement, and later a higher court set it aside. A sentence of 
that ruling reads:
  ``Discovery included more than 400 depositions, 17 expert reports, 32 
days of expert deposition testimony, and the production of over 80 
million pages of documents.''
  Eighty million pages. I have studied this issue for months, and I 
have not read 80 million pages. I am a retailer, and I have paid 
thousands of dollars in swipe fees, so I know the difference between 
point of sale and Square mobile payments. I have used these systems, 
but I still don't know.
  That is why I oppose the Durbin amendment: because I am not sure that 
this price control is necessary. Therefore, I put the Federal 
Government in the role of judge, jury, and executioner for the payment 
industry. For me to do that, I would have to be sure.
  I know that the government wasn't sure when they came up with the 
regulation. They originally came up with 12 cents per transaction. Then 
the final rule finally came in at 24 cents.
  Were they right the first time?
  Were they wrong the second time?
  There is no way to know for sure.
  I guarantee you that when we walk down to this floor and we vote on 
this issue and choose to uphold a policy which many free-market think 
tanks have said harms consumers, Members will not have read 80 million 
pages. If we are honest with ourselves, most will not have read 80 
pages. There is no way we could, given everything that is in front of 
the Federal Government, even if we wanted to.
  Economist F.A. Hayek got at this in his criticism of the planned 
economy. He said that socialism doesn't work because of what he called 
``the unavoidable imperfection of man's knowledge.''
  Hayek was referring to human beings at large. I would offer that the 
knowledge of politicians--speaking for myself, in particular--must be 
that much more imperfect.
  You don't have to believe that the banks are angels, and you don't 
have to disbelieve the retailers to oppose the Durbin amendment. You 
just have to feel a bit of doubt either way.

                          ____________________