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Economic Analysis of Claims in Support of the ‘Durbin Amendment’ to Regulate Debit Card Interchange Fees

31 Pages Posted: 23 May 2011  

David S. Evans

Global Economics Group; University College London

Howard H. Chang

Global Economics Group, LLC

Margaret Morgan Weichert

Market Platform Dynamics

Date Written: May 16, 2011


Section 1075 of the 2010 Dodd-Frank Act requires the Federal Reserve Board to regulate the debit card industry including the interchange fee banks and credit unions receive from merchants. This paper reviews the arguments in support of this regulation put forward by Senator Durbin, who proposed the amendment that led to Section 1075, large retailers, and merchant trade associations. Contrary to their claims, the leading government entities that have examined interchange fees specifically reject the approach taken by the Durbin Amendment; no US antitrust authority or court has found that MasterCard or Visa have engaged in price fixing with regard to debit interchange fees; debit card interchange fees have not increased materially over time in the US; Canadians have not benefited from zero debit interchange fees in that country since they pay more for using cards, and retail banking accounts, than Americans and since Canadians cannot use their zero-interchange fee debit cards to pay online or internationally; and consumers and small businesses will not benefit from the planned reductions in interchange fees, in fact they will lose hundreds of millions of dollars a year.

Keywords: Interchange Fees, Debit Cards, Regulation, Financial Regulation, Federal Reserve Board, Durbin, Payment Cards

JEL Classification: L4, L5

Suggested Citation

Evans, David S. and Chang, Howard H. and Weichert, Margaret Morgan, Economic Analysis of Claims in Support of the ‘Durbin Amendment’ to Regulate Debit Card Interchange Fees (May 16, 2011). Available at SSRN: or

David Evans (Contact Author)

Global Economics Group ( email )

111 Devonshire St.
Suite 900
Boston, MA 02108
United States

University College London ( email )

Gower St
London WC1E OEG, WC1E 6BT
United Kingdom

Howard Chang

Global Economics Group, LLC ( email )

1400 S. Dearborn, Suite 400
Chicago, IL 60603
United States
312-533-4602 (Phone)


Margaret Weichert

Market Platform Dynamics ( email )

3525 Piedmont Road
Building 7, Suite 300
Atlanta, GA 30305
United States


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