October 1: Where’s My “Durbin Discount?” Posted by AVCU on 10:19 AM

On the heels of USA Today declaring this week that "free checking is going the way of the free checked bag," director of the Competitive Enterprise Institute John Berleau is looking for his promised “Durbin Discount” from merchants when debit interchange caps take effect on October 1st this weekend. He opines that, as exhibited by Bank of America’s newly announced $5/month debit card fee, the Durbin measure has essentially sent free checking for consumers packing, without the off-setting discount on purchases as promised by Durbin and merchants.

Berleau, who has written on the price controls for publications such as the The Wall Street Journal, The Daily Caller and The American Spectator, explains in a brand new post on OpenMarket.org the effects of this cost-shifting for debit card processing from some of the nation's wealthiest retailers to ordinary consumers. He details new evidence that this rule might not just be costing ordinary Americans their free checking, but also their jobs. He attributes part of the 40,000 job losses at Bank of America to these price controls, as well as layoffs at a Texas community bank.

Berleau notes ironically that though "big business" is in fact to blame for these losses to workers and consumers, the business at fault is not the banking industry. Rather, he points the finger at big-box retailers such as Wal-Mart and Home Depot who lobbied "the government to line their pockets by putting a regulatory albatross on their financial suppliers and actually bar banks from making a profit on debit cards on the retail side."

Read Berleau’s OpenMarket.org article here, and yet another version focused more directly on Senator Durbin here.