New limits on debit card fees have discouraged mobile carriers from competing with Visa and Mastercard, according to a top AT&T executive.

The executive told Reuters that AT&T, Verizon Wireless and T-Mobile USA scrapped plans to launch a competing mobile payments processing network due in large part to the so-called Durbin amendment. That amendment was a late entry into the Dodd-Frank financial reform law, and requires the Federal Reserve to set limits on the amount of fees banks and networks can charge retailers for swiping debit cards.

"Some changes in the banking laws occurred with the amendments that were put in with the Dodd-Frank bill," said John Stankey, AT&T's head of business solutions. "As transaction fees were limited and things were changed, it kind of changed the business model."

When the networks launched "Isis" in November, they originally envisioned it would offer direct competition to Visa and Mastercard as another network to process payments. However, last week it was announced that Isis would be working with the two existing card networks.

The battle over the Durbin amendment -- named after its primary backer, Sen. Dick DurbinRichard (Dick) Joseph DurbinDemocrats protest Trump's immigration policy from Senate floor Live coverage: FBI chief, Justice IG testify on critical report Hugh Hewitt to Trump: 'It is 100 percent wrong to separate border-crossing families' MORE (D-Ill.) -- has been one of the fiercest on Capitol Hill for months, as banks and retailers square off with billions in revenue at stake. The Fed hopes to finalize the limits in July, but some lawmakers are pushing legislation that would delay implementation for one or two years, arguing the matter needs further study.

The Fed's proposed rules, unveiled in December and slated to be finalized in April, would slash bank fees from the current 44-cent average to seven to 12 cents per swipe.