On June 8, the US Senate dealt a blow to the banking industry by voting not to modify the Durbin Amendment in the Dodd-Frank Act. The Durbin Amendment, which goes into effect on July 21, passed in the spring of last year. It instructs the Federal Reserve to cap debit card interchange fees without considering all costs associated with networks and fraud losses. The Fed subsequently issued regulations that set the costs per transaction to range from 7 to 12 cents. Current actual costs are more than 40 cents per transaction. When Sen Durbin passed his amendment he said it would have no adverse impact on small banks because he added language that exempted banks under $10 billion from the caps.
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