Senator Richard Durbin, D-IL that sharply limits the fees debit card issuers can charge to retailers for use of those cards. Some have estimated losses of about $12 billion annually to card issuers, with the logical consequence that those institutions will raise fees and charges for other services to recoup the lost revenue.
Senator Durbin’s language, in its final form, directs the Federal Reserve to issue rules limiting the revenue that large financial institutions can receive in connection with debit transactions and governing how debit transactions get routed from merchants to financial institutions and back again.
Although Senator Durbin managed to append his language to the Dodd-Frank Act without a single hearing, on Thursday, “Durbin” came up in hearings in both chambers of Congress. Some think the hearings are part of building pressure to limit the damage.
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