Sen. Durbin Defends Reform Despite New Bank Fees
AUDIE CORNISH, Host:
This is WEEKEND EDITION from NPR News. I'm Audie Cornish.
This past week, Bank of America announced plans to charge most of its debit card users $5 a month if they use the card to make purchases. The decision by Bank of America, and other banks that have imposed similar fees of late, is meant to make up for the money bank say they will lose because of new financial rules.
Senator Dick Durbin, the Democrat from Illinois, introduced those changes to last year's Dodd-Frank financial reform legislation. It's nicknamed the Durbin Amendment, and it calls for a cap on the fees that retailers pay when you, the customer, use your debit card to make a purchase.
Bank of America blames its new debit fee on the Durbin measure. Senator Durbin disagrees.
DICK DURBIN: Let me tell you two reasons why we don't believe that. Number one: Bank of America has been losing money since they made some terrible mortgage decisions a few years ago. So it is a financial company that has not done well. Now they want to blame me for their misfortune.
Secondly, let me tell you something else. Retailers across America are finally going to get a break. They've been pushed by Bank of America and the biggest banks to pay swipe fees that are imposed on them, with no power of the retailer to even bargain. That has to come to an end.
CORNISH: We reached Senator Durbin this past week while Congress was in recess. He was on the road and Rock Island, Illinois. Durbin says at least the new rules are more transparent and they rein in what he views as excessive profit-taking on the part of big banks.
DURBIN: Banks have to do some adjusting here. And the bottom line is they should not be able to price fix with Visa and MasterCard and charge retailers across America an average of 44 cents for service which the Federal Reserve says cost them seven to 12 cents. They're dramatically overcharging American consumers and retailers.
Incidentally, you know what the slight fee is for Visa and MasterCard for debit cards in Canada? It's zero. They don't charge anything. Forty-four cents a transaction in the United States.
CORNISH: Democratic Senator Dick Durbin speaking with us from the road in his home State of Illinois.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.