Durbin presses DC mayor on swipe fee fight

By Peter Schroeder - 10/26/12 03:23 PM ET

Sen. Dick Durbin (D-Ill.) is calling on D.C. Mayor Vincent Gray to disavow comments made by one of the city's contractors after it blamed the hotly contested "Durbin amendment" for a hike in fees.

In a letter sent to the mayor Friday, Durbin accused the District of misusing resources by allowing one of its vendors to blame a provision of the Dodd-Frank financial reform law aimed at capping debit card fees.

"What’s next? Emails to District residents from contractors opining on the Affordable Care Act? Press releases blaming higher school lunch prices on the Farm Bill?" he asked.

Parkmobile, a mobile parking payment company with an exclusive contract with the District Department of Transportation (DDOT), announced Thursday that it was hiking its transaction fee to 45 cents from 32 cents. It blamed the increase on the Durbin Amendment, a Dodd-Frank provision fiercely opposed by the banking industry that sets a cap on the fees banks can charge retailers.

But Durbin insisted that the company has it precisely wrong, and that his provision was aimed at limiting fees. If a credit card company or bank increased fees elsewhere to make up for the revenue hit suffered by the Durbin Amendment, it is not fair to blame the measure aimed at limiting fees in the first place, he wrote in a separate letter to the company.

"Blaming the Durbin Amendment for Visa’s and MasterCard’s decision to raise your fees is like blaming a traffic cop for a driver’s decision to speed and drive recklessly," Durbin told Albert Bogaard, CEO of Parkmobile.

Durbin also trained his fire on the local D.C. government for originally announcing the fee hike using Parkmobile's Durbin finger-pointing.

DDOT originally sent out a press release announcing the fee hike, citing Parkmobile's explanation that it was due to "recent federal legislative reform enacted by the Dodd-Frank Wall Street Reform and Consumer Protection Act’s Durbin Amendment." The department quickly sent out an amended press release, explaining the hike was due to "increased processing costs borne by Parkmobile."

Durbin called on Gray to make clear that the district government was not endorsing Parkmobile's rationale, calling it "inappropriate" for a government contractor to offer up "offer up incorrect, unsolicited legislative analysis while hiding behind poorly reasoned excuses for their own price hikes.”

He also noted that, as chairman of the Senate Appropriations subcommittee on Financial Services and General Government, which oversees federal funding to the District, he is "very interested in the operations of the District of Columbia."

Pedro Ribeiro, a spokesman for the D.C. government, said DDOT should not have sent out Parkmobile's Durbin-blaming language originally, and sought to keep the district out of the crossfire.

"It’s pretty clear that DDOT shouldn’t have used Parkmobile’s analysis because that’s not their job," he said. "This is a debate between Parkmobile and the senator."