Senate Majority Whip Dick Durbin (D-Ill.) took to the Senate floor Thursday to respond to a Wall Street Journal editorial, published the same day, that attacked Durbin’s plan to set swipe fees on debit card transactions as unnecessary government interference in business.
“There is no free-market system when it comes to interchange fees imposed by these duopolies, Visa and MasterCard,” Durbin said. “You would think that even the Wall Street Journal, this bastion of conservatism and defender of the free market, would acknowledge the obvious.”
The rule has not yet been implemented, but a preliminary study from the Fed indicated that the price would be moved from around 40 cents to 12 cents per transaction.
The Journal piece, titled “Debit Card Debacle,” called Durbin’s law “another mess to clean up from the 111th Congress.”
“The loss of that revenue will force debit card issuers to raise fees elsewhere to compensate,” the editorial said.
The editorial appeared in the wake of an effort launched Tuesday by a bipartisan coalition of senators that would prevent Durbin’s law from being immediately enacted.
The Debit Interchange Fee Study Act would suspend implementation of the proposed rule for two years and calls for a one-year study of debit interchange fees.
“The federal government shouldn’t be telling private companies what they can charge for goods and services; that’s price fixing, and that’s exactly what the Durbin amendment does,” said Sen. Bob Corker (R-Tenn.), a member of the Senate Banking Committee. “The hastily passed Durbin amendment will have numerous unintended consequences for debit card users.”
The legislation, S. 575, is sponsored by Sens. Corker, Jon Tester (D-Mt.), Jon Kyl (R-Ariz.), Ben Nelson (D-Neb.), Tom Carper (D-Del.), Pat Roberts (R-Kansas), Chris Coons (D-Del.), Mike Lee (R-Utah), and Pat Toomey (R-Pa.).
“Mr. Durbin pitched his bill as pro-consumer but it was really an attempt to rob banks and debit-card issuers in order to pay off his campaign check writers in the retail industry,” the editorial said. “As usual, the little guy is getting trampled.”
Durbin shot back that the Journal is the one that doesn't care about the little guy.
“I don't know if the Wall Street Journal would be viewed by any as a great pro-consumer magazine,” said Durbin. “How often would you turn to the Wall Street Journal to find out who is going to stand up for the little guy in America? Almost never.”