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Repealing the Durbin Amendment: A Vote for the Rule of Law

The Durbin Amendment, or Section 1075 of the Dodd–Frank Act, requires the Federal Reserve to cap the debit card interchange fees that large banks charge retail merchants. This outcome has been portrayed as a victory for consumers, but it is doubtful that these reduced fees will ever result in lower consumer prices. More importantly, the Durbin Amendment is a defeat for the rule of law because it forces Congress into adjudicating a legal dispute.

For decades, retailers have accused card-issuing banks and card network companies of colluding to fix prices, and Congress long ago established the legal framework for resolving these types of disputes. The Durbin Amendment, instead of allowing courts to fulfill their well-established role, places federal price controls on banks. Congress should not arbitrarily appoint itself the final judge and jury in discrete antitrust disputes. Repealing the Durbin Amendment would help restore the separation of powers created by the Constitution.

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