The Electronic Payments Coalition is unimpressed with the Durbin Amendment and wants it nixed. The coalition claims the amendment has allowed big-box retailers to pad their bottom lines to the detriment of smaller competitors, community banks and credit unions.
What has been a blessing for merchants and big-box retailers has been a dirge for consumers, small mom-and-pop stores, community banks and credit unions.
The Durbin Amendment has not been popular among consumers. The Electronic Payments Coalition (EPC) wants the amendment to be repealed and is asking legislators to continue to support H.R. 5465 and section 335 of H.R. 5983.
According to the EPC, the big-box retailers have pocketed more than $36 billion. And this comes at the expense of small mom-and-pop stores and customers.
Molly Wilkinson, executive director of the EPC, said: “The numbers don’t lie: The Durbin Amendment has been a complete failure for everyone except the big-box stores, who have padded their bottom lines to the tune of $6 billion–$8 billion each year … A majority of consumers support repealing the Durbin Amendment, making it imperative Congress supports efforts to end this amendment.”
There is also data to suggest that the amendment affects community banks and credit unions because they face higher costs in complying with all of the unnecessary provisions of the amendment.
The EPC also claims that retailers are failing to provide strong data security standards to protect customers’ personal and financial data.
According to Wilkinson: “Banks and financial institutions comply with the requirements of the Gramm-Leach-Bliley Act (GLBA) because they are vested in protecting their customers’ information and helping financial breaches to decline. The same effort should be required of others that handle sensitive customer data … As the number of retail breaches continues to grow, there needs to be similar standards on the retail side. Collaboration is key to best protecting consumers.”
The EPC found that just 6 percent of consumers trust retailers to develop new payment technologies, but three-quarters trust banks and financial institutions to do so. EMV chips are a step in the right direction and have already stimulated a decline in counterfeit fraud. However, criminals are now turning to malware and card-not-present fraud.
The EPC is calling for national data security standards to protect customers’ information. The Data Security Act of 2015, H.R. 2205, would hold retailers to similar standards as those that apply to financial institutions.
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