Supreme Court Ignores Durbin Amendment Petition

The Durbin Amendment, part of the Dodd-Frank Act of 2011, has caused major friction between retailers and banks.

The amendment, which set a cap on swipe, or interchange fees for debit card transactions found itself up for review in the Supreme Court today.

In what can be seen as a major victory for banks and card issuers, the Supreme Court declined to review the Durbin Amendment today, as petitioned by numerous retail groups. The Durbin Amendment currently caps debit card fees at 21 cents per transaction.

The original Durbin Amendment, named after Senator Dick Durbin, called for these fees that are handed down to merchants to be capped at 7 to 12 cents.

The average debit card swipe fee was around 40 cents prior to the Durbin Amendment.

While retailers were no doubt happy to see their required fees slashed, The National Retail Federation along with other retail groups sued the Federal government over the pricing of the fees from 7 to 12 cents to 21 cents.

The Fed’s reasoning was that the associated costs for fraud monitoring for debit card transactions could also be incorporated into the cap.

Banks argued that interchange fees were to be used to expand on consumer benefits including rewards for checking accounts, which coincidentally due to the cap, have been reduced or eliminated altogether.

Regardless, consumers will be stuck in the middle of this literal battle over nickels and dimes which amounts to billions in annual revenue.