As we approach the fourth anniversary of the implementation of the Durbin amendment, the Federal Reserve Bank of Richmond has released a new study which finds that debit interchange price caps have had the exact negative impact that many people predicted when it became law. While big-ticket retailers have racked up nearly $32 billion from government regulated debit card interchange fees, those benefits don’t extend to consumers and small businesses. 

According to the study, major retailers that focus on big-ticket items such as sporting goods and furniture experienced lower interchange fees due to the government mandate imposed by the Durbin amendment. However, instead of passing savings along to consumers as merchants repeatedly promised, the Fed study found the exact opposite. While merchants are quick to blame interchange fees for higher retail prices, government-mandated caps didn’t lead to savings for consumers. According to the study, “few merchants are found to reduce prices or debit restrictions as debit costs decrease.” 

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Retailers have claimed that the study’s findings indicate a need for further interchange regulation, but that stands logic on its head. Study after study has shown that price caps have not led to consumer benefits – they’ve had the opposite effect. For instance, a study last year found that while retailers are not passing interchange savings on to consumers, government price caps are reducing the availability of fee-free bank accounts. 

And the pain isn’t only to your wallet. Not only do consumers not see savings, but this type of rampant price fixing can hamper innovation and slow the development of next-generation payments technologies, which will bring myriad benefits to all of us. This is exactly why Congress shouldn’t engage in price fixing for banking services in the first place. What is meant to help consumers in many cases does not—and the recent Fed study shows this lesson playing out.   

Price controls simply don’t work. They don’t benefit consumers. They do nothing for small business owners, and they don’t help community banks and credit unions. Instead, they lead to unintended consequences that impede innovation and harm everyone who benefits from electronic payments. The only group that benefits from the Durbin amendment is the same one that wrote the law, big-box retailers who have pocketed an $8 billion yearly windfall from the caps. 

Without a doubt, the Fed study is concrete, unbiased evidence that this windfall has yet to be passed on to consumers. Now, four years later and $32 billion richer, a select group of the world’s largest retailers have their hands out again. It needs to stop. That’s why if Congress decides to get involved in this fight again, in any way, it should be to repeal the Durbin amendment once and for all.

Fine is president and CEO of the Independent Community Bankers of America