Small banks continue to rake in revenue from interchange fees on debit cards, despite fears that the Durbin amendment would hurt them as much as larger institutions, according to a report released by the Federal Trade Commission.
Congress requested the report in last year's appropriations bill. The report "examines the impact of the so-called Durbin amendment, a provision of the Dodd-Frank Act that required the Federal Reserve Board to limit interchange fees on debit cards. The measure included a carve-out for smaller institutions - one that many community bankers said wouldn't work, raising concerns that payment networks would coordinate with larger banks," writes American Banker's Victoria Finkle.
The report found that interchange revenue has held up for small institutions despite the new rules.
"On the plus side, the report indicates that small banks are still collecting higher interchange fees. Yet the big banks are getting less. For Visa and MasterCard, the benefit here is that the report provides no additional ammunition for critics of interchange fees," Jaret Seiberg, a managing director at Guggenheim Partners stated.
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