U.S. Sen. Dick Durbin, a Democrat from Illinois, announced on April 23 that he will retire after his current term ends in January 2027.
While he isn’t what you might call the Senate “finance guy” — he’s the top Democrat on the Senate Judiciary Committee, not the Banking Committee — Durbin has been impactful on a number of legislative financial actions over his decades of service.
In particular, he helped reshape debit card processing fees in a major way with the Durbin Amendment back in 2010. More recently, he’s been working to shake up the credit card interchange landscape as a sponsor of the Credit Card Competition Act.
While he’s positioned his efforts as pro-consumer, the results — or anticipated results — of his efforts haven’t always handed consumers a win.
The eponymous Durbin Amendment (part of the Dodd-Frank Wall Street Reform and Consumer Protection Act) greatly reduced the debit card processing fees that merchants pay banks every time a customer uses their card. The act was signed into law in 2010.
Among other things, the amendment limited the debit interchange fee to a maximum of 0.05 percent of the transaction value plus 21 cents (with an extra cent for fraud protection). In practice, this brought the average debit card processing fee down 52 percent (from 50 cents to 24 cents), according to the International Center for Law and Economics.
Merchants, as you might expect, rejoiced, but the net effect on consumers wasn’t as positive as intended.
Though their transaction costs had decreased thanks to the Durbin Amendment, most retailers did not pass those savings on to consumers. In fact, only 1 percent of retailers lowered prices, according to the Richmond Fed. And, in an additional blow to consumers, banks reacted to receiving lower interchange fees by scaling back debit card rewards programs, raising other fees (such as ATM and overdraft fees) and making it harder to get a free checking account, the Cato Institute reports.
The Durbin Amendment was well intentioned, but market conditions backfired and prevented consumers from realizing the desired cost savings. Unfortunately, this often happens with fees. They can be like Whack-a-Mole — one goes down, another comes up.
More recently, Durbin has set his sights on reducing credit card interchange fees.
Merchants love to complain about these levies (the average is about 2.2 percent, according to The Nilson Report). The Merchants Payments Coalition says credit card processing fees are most merchants’ highest cost aside from labor, totaling a record $187.2 billion in 2024. Durbin is the chief architect of the Credit Card Competition Act (CCCA), a bill first introduced in 2023 that seeks to lower merchants’ interchange fee burden, but differently than the Durbin Amendment did for debit cards.