WASHINGTON – U.S. Senate Majority Whip Dick Durbin (D-IL), Chair of the Senate Judiciary Committee, today delivered an opening statement during a Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Protection hearing titled, “Competition Policy for the Twenty-First Century: The Case for Antitrust Reform.” During his statement, Durbin discussed his longstanding efforts to bring fairness, transparency and competition to credit and debit card interchange, or swipe, fees. The 2010 “Durbin Amendment” to the Dodd-Frank Wall Street reform law directed the Federal Reserve to impose reasonable limits on debit card interchange fees that are imposed by Visa and Mastercard on retailers and merchants. Since its enactment, the Durbin Amendment has helped achieve billions of dollars in reduced interchange fees for Main Street merchants and their customers.
Even with Durbin’s efforts, last year, merchants paid out a staggering $62.5 billion in swipe fees imposed by Visa and Mastercard. And according to public reporting, Visa and Mastercard intend to raise many of their fee rates next month. All those costs are ultimately borne by consumers.
“These fees, swipe fees, were being charged by Visa, Mastercard, and the other credit card companies to all of the merchants and retailers who were using them for card transactions. It turned out they were not negotiated, they were mandated. Visa and Mastercard said this is what you will pay for each transaction at your restaurant or shop. And you have no bargaining power whatsoever. If you don’t want to pay it, don’t use Visa or Mastercard. See how long you last,”Durbin said. “Those fees were far in excess of any reasonable measure of cost, and far higher than what would have been charged in a competitive market. But Visa and Mastercard still are so dominant in the payments market that merchants couldn’t stay in business without using their cards… Where is the policing authority to stop this duopoly from doing this to every merchant and retailer in America?”
Video of Durbin’s opening statement is available here.
Audio of Durbin’s opening statement is available here.
Footage of Durbin’s opening statement is available here for TV Stations.
For years, Durbin has worked to shine a light on how competition policy could lead to a more efficient, lower cost, more secure, and more competitive credit and debit card industry. Just last week, Durbin and Rep. Peter Welch (D-VT) sent a letter to the CEOs of Visa and Mastercard urging the companies not to raise interchange fee rates during the pandemic.