GLASTONBURY, Conn.--(BUSINESS WIRE)--
Dear Chairman Bair,
The Durbin amendment must be delayed.
As you are well aware, much of the current talk on Capitol Hill focuses
on the scheduled July 21 implementation of the Dodd-Frank Wall Street
Reform and Consumer Protection Act’s Durbin amendment, with members of
Congress, federal regulators and lobbyists engaged in a heated debate
over the provisions to this legislation.
It is clear to me these laws were created to reform Wall Street and
protect consumers, yet neither does. Community banks and credit unions
account for half of all small business loans, which lubricate local
economies through business expansion and new jobs, as well as serve the
essential everyday banking needs of consumers such as mortgages, car
loans and deposit accounts. And when a community bank or credit union is
closed, local communities have fewer financial alternatives which leads
to more underbanked consumers and slower economic growth from small
businesses. So what benefit is there in enacting a law that will desert
Main Street America by increasing the failure and consolidation of
community financial institutions in favor of strengthening their larger
counterparts, and by bringing an already slow economic recovery to a
There are aspects of Dodd-Frank that are necessary to help prevent
another economic collapse, but in the rush to both place blame and
assure the American people that action was being taken there was not
enough thoughtful examination of the bill and its policies. In fact, in
a Congressional hearing just over a month ago, Fed Chairman Bernanke
admitted the interchange measure could hurt small banks, producing a
negative impact on local economies.
Chairman Bair, community-based financial institutions came into the
recession strong, offering balance to their larger counterparts because
they hold more of their own loans and have fewer charge-offs, and
largely avoided the subprime mortgage crisis. Congress should have
lauded community banks and credit unions for being pillars of economic
strength, but instead forced these institutions to adhere to unnecessary
compliance and regulations, while watching Wall Street banks score
To cover the losses from the proposed limits to interchange fees, an
average $750 million financial institution would have to do one of the
I appreciate your step in sending a letter to the Federal Reserve urging
the adoption of a two-tiered pricing system for debit interchange. I
suggest that only opens the door for more regulations, more debate and
more lobbying by those hoping to improve their election coffers or
corporate bottom lines.
I realize the outright repeal of the Durbin amendment is not a likely
option, but delaying implementation to gain a better understanding of
how it will affect all parties involved is a sensible step in ensuring
we get this right.
Thank you for your time, and I do hope you continue to look deeper into
the unintended negative consequences Dodd-Frank and the Durbin amendment
have on community-based financial institutions and their ability to lead
an economic recovery.
For Open Solutions Inc.Hadas Streit, email@example.com
Source: Open Solutions Inc.