We’ve been following the fate of the Durbin Amendment because with its price controls and favoritism, it’s a great example of a bad policy. It also has a Minnesota angle, too, as a recent editorial in the Star-Tribune mentions. The editorial supports a delay in the implementation of the Durbin Amendment, something I wrote about earlier, and would support. (Even better would be to scrap […]
Financial industry
The Price-Control Republican Caucus
Updated March 17: The Wall Street Journal picked up the idea of “Republicans for Price Controls” this morning in its lead editorial. They have a great idea: rename the Durbin Amendment the “Payday Lender Empowerment Act.” Price controls do not work. They distort markets and hurt consumers. Period. Unfortunately, the Beltway is attempting to deal with this by “delaying” the law for two years. As […]
Meet the Anti-price-fixing Senators
Proving that some sort of economic sense can still be found in both parties, nine senators have signed onto the Debit Interchange Fee Study Act, which would delay the price controls imposed on debit transactions for two years. Sen. Jon Tester (D-Mont.) has said, “The stakes are simply too high to move forward with this rule without a closer look at the impact on consumers, credit […]
When Will They Ever Learn? Durbin Amendment Brings Price Controls, More Corruption
Doing a little more research into the Durbin Amendment, which causes the power of the U.S. Government to intervene in a commercial dispute between merchants and banks, I found something remarkable: even the New York Times admits that this measure is a price control. The website of Sen. Richard Durbin (D-Ill.) includes a reprint of an article from the New York Times, which reads in part: […]
Price controls for consumer banking?
Can some good news come out of Washington DC? Yes. Key regulators at the Fed and FDIC have been signalling for weeks that they do not support price controls contained in the Durbin Amendment to the financial overhaul known as “Dodd-Frank.” This according to an article at the Star-Tribune, among other places. Under the draft of regulations proposed by Fed staff, the U.S. government “would cap the fees […]
Large Government Breeds Rent-seeking
Do you prefer to use credit or debit cards rather than write checks? If so, you should know that the federal government is taking steps that could mean you’ll be paying an increased or new annual fee for that card. “Plastic” forms of payment are incredibly useful, but there are costs associated with them, including the expenses of issuing the cards and maintaining accounts. To […]
Durbin, Dodd, Frank, and Lord Have Mercy
The more government intervenes in the financial markets, the more it finds a need to … intervene some more. That may be one message from the Dodd-Frank financial “reform” law that I wrote about the other day. The Wall Street Journal notes in an editorial that Daniel Tarullo, a governor of the Federal Reserve, now says the law, meant to protect taxpayers, could be creating institutions that are, as […]
Intervening in a Private Fight
Businesses have a love/hate relationship with credit and debit cards. On the one hand, the cards boost sales and remove the risk to the merchant that they will get paid with a bounced check. On the other hand, merchants have to cough up fees that pay for everything that’s involved in keeping that payment system going. Recently, some major merchants have cheered Congress onto imposing […]