Sen. Richard Durbin on Monday sought to rebut claims by banking groups that a provision in the Dodd-Frank Act that limits interchange fees on debit cards will prove harmful to consumers.
"It is lucrative for the banks … but the system is unfair to consumers, who pay tens of billions per year in fees passed on to them in the form of higher retail prices," wrote Durbin, D-Ill., in a letter to the American Bankers Association.
He argued his provision does not set "price controls" and disputed analysis that suggests it will hurt community banks. Durbin pointed to an op-ed published in American Banker by Christopher Leonard, the chief operating officer and general counsel for Velocity Solutions Inc., which said that "despite fear that has run rampant through under-$10 billion banks, we think they are winners."
The letter came ahead of a House subcommittee hearing on the issue scheduled for Thursday.
