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Never let it be said that Illinois politicians don't know a good fight when they see one. Sen. Dick Durbin (D-IL), the sponsor of the so-called Durbin Interchange Amendment contained in the Dodd Frank Act, came out swinging against the banking industry recently in his best UFC impersonation.
In a February 14 bare-knuckles letter to the American Bankers Association, The Senate minority whip, called the banking industry's public comments about the Durbin Interchange Amendment "misleading" and "distorting," and accused the industry of "using scare tactics" when opposing his long sought bill.
Sen. Durbin also accused bankers of making "misleading claims" about debit card fraud costs, presumably to justify their case against capping interchange.
In fact, Sen. Durbin countered the industry's accusation that the amendment amounts to price controls by accusing Visa and MasterCard of "price fixing," presumably without the imprimatur of Congress that the price caps contained in Durbin have.
He also defended himself against the jab that Durbin will harm consumers. Consumer groups widely support the bill, according to Sen. Durbin.
I appreciate the fact that Sen. Durbin took the time to write. And I hope that our friends over at the ABA take the time to read his lengthy letter.
But when you cut through all of it, you have to admit that telling a company it can only charge no more than 12 cents for a service does kind of sound like you're putting lid on the price of that service, no matter how much you justify it.
And when publicly traded companies include in their 10-Q reports to the SEC that they're concerned Durbin will cost millions of dollars in revenue and that it may have a material effect on operations down the road, I don't think you can call that scare tactics. I don't think the SEC scares easily. And I don't think public companies scribble anything into a public filing that comes into their heads, like it was the essay portion of the SATs.
Sen. Durbin can rightly claim that consumer groups have lined up behind his bill. But even he would have to admit that these groups rarely if ever--okay, never--advocate a pro-banking or pro-industry position. So I think you have to discount that support.
The fact is that there is still a good deal of opposition to this bill and it grows every day. No amount of purple prose splashed up on Capitol Hill will change that right now.
Let's hope we get a calmer, more rational look at the facts over on the House side in the February 17 hearing.
In a February 14 bare-knuckles letter to the American Bankers Association, The Senate minority whip, called the banking industry's public comments about the Durbin Interchange Amendment "misleading" and "distorting," and accused the industry of "using scare tactics" when opposing his long sought bill.
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| Sen.Dick Durbin (D-IL) |
In fact, Sen. Durbin countered the industry's accusation that the amendment amounts to price controls by accusing Visa and MasterCard of "price fixing," presumably without the imprimatur of Congress that the price caps contained in Durbin have.
He also defended himself against the jab that Durbin will harm consumers. Consumer groups widely support the bill, according to Sen. Durbin.
I appreciate the fact that Sen. Durbin took the time to write. And I hope that our friends over at the ABA take the time to read his lengthy letter.
But when you cut through all of it, you have to admit that telling a company it can only charge no more than 12 cents for a service does kind of sound like you're putting lid on the price of that service, no matter how much you justify it.
And when publicly traded companies include in their 10-Q reports to the SEC that they're concerned Durbin will cost millions of dollars in revenue and that it may have a material effect on operations down the road, I don't think you can call that scare tactics. I don't think the SEC scares easily. And I don't think public companies scribble anything into a public filing that comes into their heads, like it was the essay portion of the SATs.
Sen. Durbin can rightly claim that consumer groups have lined up behind his bill. But even he would have to admit that these groups rarely if ever--okay, never--advocate a pro-banking or pro-industry position. So I think you have to discount that support.
The fact is that there is still a good deal of opposition to this bill and it grows every day. No amount of purple prose splashed up on Capitol Hill will change that right now.
Let's hope we get a calmer, more rational look at the facts over on the House side in the February 17 hearing.
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