By Peter Schroeder - 10/12/11 05:26 PM EDT
Bank of America came under harsh scrutiny after it announced it would be charging a $5 monthly fee for debit-card holders, blaming the Durbin Amendment in the process. Even President Obama got into the action, saying in a recent interview that banks don’t have an “inherent right” to a certain amount of profits if it means mistreating customers.
While the amendment included an exemption from the new cap for smaller banks, the banking industry has repeatedly argued that competitive forces will require them to adopt comparable fees to the big banks. Federal Reserve Chairman Ben Bernanke aired similar concerns before Congress, saying such an exemption might not be workable.
Owens said he was behind the repeal bill because smaller institutions would not be adequately protected.
“While Congress clearly intended to exempt these smaller institutions from the cap on interchange fees, it’s clear the Durbin Amendment will have unintended costly consequences for my constituents and their checking accounts,” he said.
But Durbin’s office contends that the legislation simply amounts to “another big bank bailout.”
“Last year’s reforms added fairness, transparency and competition to a market that operated for years without,” Durbin spokesman Max Gleischman said. “Going back to the old system would take money out of the pockets of consumers to pad the profits of the nation’s largest banks.”
Previous attempts to stifle the Durbin Amendment have failed in Congress. Legislation to delay the implementation of it came up just a few votes short in the Senate this summer.
— This post was updated at 3:27 pm.