3 ETFs Impacted by Durbin Amendment
Kevin Grewal submits: The Durbin Amendment seeks to reduce credit and debit card networks from imposing anti-competitive restrictions and high transaction fees on small businesses, merchants and government agencies ... and could provide positive support for some large-cap and regional banks. More specifically, the Durbin Amendment is aiming at preventing both MasterCard (MA) and Visa (V), who constitute roughly 80 percent of all credit and debit card transactions, from continuing to increase debit card interchange fee rates. To regulate the fee structure, the amendment would direct the Federal Reserve to issue regulations to ensure that interchange fees imposed are “reasonable and proportional” to the cost incurred in processing the transaction. Initially, under the amendment, the Fed proposed a haircut on signature and online debit interchange fees, bringing them down to 12 cents per transaction, which cut into earnings for some banks by as much as 10%. Many analysts and experts predict that whenComplete Story »
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