Durbin Statement on DOJ Interchange Settlement with Visa and MasterCard

Press Release

Assistant Senate Majority Leader Dick Durbin (D-IL) released the following statement today after the Department of Justice announced they had reached a settlement with Visa and MasterCard that would require the two companies to allow merchants to offer discounts, incentives, and information to consumers to encourage the use of payment methods that are less costly.

"I'm pleased that the Department of Justice has recognized what we have long argued -- that Visa and MasterCard have created a system that lines their pockets by excluding competition and nickel and diming consumers," Durbin said. "Earlier this year we changed the way credit card companies treat consumers and small business owners when it comes to debit cards and this settlement makes some of the same changes to the credit card market. Under this settlement, merchants will now be given more choices as to how they process card transactions and can pass those benefits on to consumers in the form of lower prices."

Earlier this year, Durbin successfully added a bipartisan amendment to the Senate's Wall Street reform legislation that would require the Federal Reserve to determine if the current interchange fees structure is both "reasonable and proportional" to the real cost of processing a debit card transaction. The amendment would also allow small businesses to offer discounts to consumers when they use cash, checks or debit cards.

Interchange fees are supposedly charged by Visa and MasterCard in order to cover the cost of processing a credit or debit card transaction. These fees continue to rise even though processing costs have decreased. Nearly $50 billion in interchange fees were charged by credit and debit card networks in 2008 -- coming out of the bottom lines of small businesses, charities and government balance sheets. Of these fees, 80 percent went to just ten large banks.

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