Merchants Payments Coalition: Bankers Don't Believe What Their Lobbyists Are Saying

60% of American Banker readers agree that debit card fee reforms will help small banks and credit unions.

March 15, 2011

WASHINGTON - The Merchants Payment Coalition released information earlier this week that seeks to set the record straight about the effects that the Durbin Amendment would have on banks.

Citing a March 3 article in American Banker, "Nevermind the Lobbyists, Durbin Amendments Helps Small Banks," MPC said the article??s author refuted the notion that interchange reform would hurt community banks.

As the Durbin Amendment excludes banks with assets under $10 billion, "It takes a hyperactive imagination to see how these banks could be hurt by it. Lobbyists have the requisite inventiveness," the author said, continuing that if large banks receive less interchange than they do now, small banks will be able to compete better, imposing lower fees while giving greater rewards to depositors.

However, this flies against what bank lobbyists have been saying, the author wrote, who "have put forward some very far-fetched arguments about how, in some upside-down world, small banks are still going to be losers rather than winners from Durbin."

ICBA Bancard took issue with the article??s premise and surveyed American Banker readers to see whether they agreed with the article (ICBA Bancard is the 23rd largest issuer of debit cards in the U.S.).

According to the survey results, 60 percent of voters sided with the article and its conclusion that interchange fee reform would aid small banks.

The poll demonstrates that real bankers know small banks will be helped by the Federal Reserve rule and that what is being said on their behalf is poppycock, the MPC said.

Read more about interchange fees on the NACS website.

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