July 27, 2021

NAFCU urges Congress against expansion of Durbin Amendment to credit cards


NAFCU, along with several financial trade organizations, wrote to the Senate Banking Committee and House Financial Services Committee Monday to urge lawmakers against the expansion of the Durbin Amendment to credit cards.

"Support for any legislation on this topic would undermine the overall health and security of the U.S. payments ecosystem and have significant negative implications for consumers and small businesses at a time when the U.S. economy is just starting to recover from a global pandemic," wrote the group. "Not only would this be harmful public policy, but the merchant lobby is choosing to ignore the fundamental differences between debit cards and credit cards, which operate completely differently. For the reasons discussed below, we call on Congress to reject this special interest giveaway."

In the letter, the group argued that merchant groups put consumer spending at risk by interfering with the efficient way credit cards work today and could negatively impact small businesses – which derive significant value through critical benefits that are supported by credit cards. A coalition of merchant groups wrote to the Committees last month urging an expansion of the Durbin Amendment to credit.

Under the Dodd-Frank Act, the Durbin Amendment directed the Fed to regulate debit interchange fees. Proponents of the Durbin amendment claimed that consumers would see lower prices. However, NAFCU has previously argued that the Durbin Amendment should be abandoned as it was supposed to benefit consumers with lower prices and there is no evidence that merchants have passed along their savings to consumers in the form of price cuts.

The association will continue to advocate against efforts that would undermine credit unions' interchange income and limit their ability to offer their 125 million members affordable products and services. In addition, NAFCU will continue to share with Congress how credit unions have stepped up to support their members facing financial hardships, including skip-a-pays without penalty, waived fees, low- or no-interest loans, loan modifications, no interest accruals, and more.

Learn more about NAFCU's advocacy on interchange fees here.