Voters sent a clear message on Election Day last month. Big government regulations that cost consumers and strangle our economy have long overstayed their welcome. The politicians who support these measures, likewise, were shown defeat as well, as Donald Trump promised government reform and reducing needless regulations on his way to the presidency, while voters gave both houses of Congress to the Republicans. Eight years of Barack Obama’s heavily regulatory, big government agenda were rejected.
In 2010, Congress passed Dodd-Frank to impose new regulations on a variety of financial services, including the Durbin Amendment to place price controls on the interchange fees banks charge retailers for processing debit and credit card transactions. We were promised that the saving achieved by lowering these fees would be passed on to consumers at the cash register by retailers. But this has not happened in the six years since Dodd-Frank became law.
As part of the Dodd-Frank that was promoted by its sponsors as strong pro-consumer legislation, The Durbin Amendment was clearly a crony capitalist benefit for the big box retailers, at the expense of consumers. None of the $36 billion in savings from the regulation of the interchange fees ever made it to consumers, it simply enhanced the profits of big box retailers who passed none of it on to consumers.
Eliminating this benefit for big box retailers, created by the Durbin Amendment, is part of the larger Financial CHOICE Act, introduced by Rep. Jeb Hensarling (R-TX), that includes many strong pro-consumer provisions. This legislation not only reforms Dodd-Frank by repealing the Durbin Amendment, it will also reform the Volcker Rule, which limits the ability of banks to make risky trades with their own money. Additionally, the bill will reform the structure and funding of the Consumer Financial Protection Bureau, an almost unaccountable regulatory agency created under Dodd-Frank.
With the repeal and reform of many of the regulations enacted via Dodd-Frank, banks and other financial service providers will be in better position to provide better services to consumers and small businesses. Consumers could see the near universal access to free checking accounts, as it existed prior to the enacting of Dodd-Frank. It will also free the economy of the burden of draconian regulations, helping to facilitate economic growth and job creation.
Donald Trump campaigned strongly against such back room deals, such as the Durbin Amendment, that benefit special interests at the expense of consumers, and against the heavy-handed big government regulations that limit consumer choices and drive up the costs of providing financial services. The election of Trump, along with Republicans who opposed regulations like Dodd-Frank, sends a clear message of the direction desired by voters.
Congress how has a clear mandate to pass the Financial Choice Act. Enacting this strong pro-consumer legislation would be a great gift to the American people in the upcoming session of Congress, and would no doubt be a measure that President-elect Trump will gladly sign once he takes office. The American people voted for this on Election Day, and now Congress and the new president can deliver by passing the Financial CHOICE Act.