It’s been 14 years since passage of “the Durbin Amendment,” that capped interchange fees that banks charge retailers for use of debit cards. This was supposed to save consumers money.

It didn’t. In the years after the price controls passed, there was virtually no discernible effect on prices consumers paid. An estimated 98% of retailers raised or kept prices the same, meaning shoppers never saw any savings. Merchants saw small gains, but fraud increased by 60%, negating most of the gains.

Consumers were the big losers because many lost or faced restrictions on popular rewards programs. Cash back debit ended. Many banks added various account fees to offset the lost revenue. Small businesses were supposed to benefit, but they merely faced higher costs and weaker payment systems.

Now, Senator Durbin and even some Republicans in the Senate are pushing the same failed policy on credit cards. Price controls would likely cripple most rewards programs, which is where almost all of the swipe fees go as card issuers compete for consumers.

Still, Durbin wants the proverbial second kick of the mule.

Our congressional spies tell us that Durbin is trying to sneak the credit card caps into must-pass bills– perhaps as amendments to unrelated legislation like the CLARITY Act, and possibly the NDAA.

We debunked this proposal in a 2023 paper:

The biggest losers are likely to be lower income consumers who will more likely be denied access to credit cards and will have to carry around big wads of cash to buy things. Our view is: if it ain’t broke, don’t fix it. Credit cards are wildly popular. The average American carries three to four and with accounts now connected to cell phones, tapping is replacing swiping, making payments even easier.