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Repealing the Durbin Amendment Necessary for Dodd-Frank Reform

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.

Recently, the Trump Team laudably pledged that the destructive Dodd-Frank Act will be “dismantled” quickly within the President-elect’s ascension to the Oval Office.


While getting rid of anything within this job-killing legislation is good news for conservatives, one provision that absolutely has to go is the Durbin Amendment.

In case you don’t know, the Durbin Amendment was an especially awful last minute addition to the Dodd-Frank Act made on behalf of big box retailers.

Blatant cronyism on display for all to see.

The Durbin Amendment is the foundation for the market-manipulating price controls that were forced on interchange fees charged during debit card transactions. Retailers promised to pass along the savings to consumers, but as you may have guessed that never happened and nearly $36 billion has been funneled into special interests and to pad bottom lines. Consumers saw absolutely no relief at the cash register from the Durbin Amendment as promised.

In addition to hurting consumers, the Durbin Amendment goes on to abuse small community banks and credit unions who were promised to be exempted from the heavy burden placed on them by Dodd-Frank and Durbin. The sheer weight of regulatory controls applied to the small banks has severely limited the business they can offer their communities.


In an attempt to rein in the big banks and Wall Street, small banks took a huge hit as they had no way to comply to the behemoth of new rules and regulation created by Dodd-Frank. Most of them ceased doing much of the business that had been their bread and butter.

Rep. Jeb Hensarling (R-TX) has presented the conservative alternative to Dodd-Frank. It is called The Financial Choice Act, and will do away with the burdensome Durbin price controls entirely. If the new congressional session could pick it up and pass it, they would undoubtedly receive President Trump’s signature of approval and become heroes of American business!

Hensarling describes what it does, “It ends taxpayer funded bailouts once and for all. It stops the cronyism that allows the powerful and well-connected to game our system. It lifts bureaucratic red tape – intended for big banks and Wall Street – off of community banks on Main Street. It requires banks to be well capitalized to prevent another financial crisis and puts in place the toughest penalties in history to protect consumers from fraud and deception. And it will help grow the economy for all Americans…not just those at the top.”


The Financial Choice Act will go a long way to revitalizing our hometown banks who are generally better suited to helping small businesses grow. It’s exciting to imagine what it would be like to see the burden of Dodd-Frank fade into memory. American small business is currently stifled by the regulatory red-tape that is little more than a hidden tax on the American people.

Throughout history, price controls have always hurt American consumers-- the precise people they intend to help -- and repealing them needs to be a top priority for the new Republican-controlled Congress and Trump Administration, which has promised an economic boom for small town America. This is by far one of the best ways to spark a lackluster recovery that has been the Obama economy.

Freeing up the small-town lenders to do what they do would light a fire under a whole new generation of entrepreneurs looking to make America, or at least their small town, great again.

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