Credit unions back legislation to update Durbin Amendment threshold

Legislation to modernize the Durbin Amendment’s asset threshold was introduced Wednesday night in the Senate by Sens. Ted Cruz, R-Texas, and Katie Britt, R-Ala., and in the House by Rep. Andy Barr, R-Ky. America’s Credit Unions wrote in support of the bill, which would index the Durbin Amendment’s threshold to inflation (compared to the current $10 billion asset threshold).

“As credit unions grow by serving more members and keeping pace with the economy, many are swept into limits that were intended for much larger institutions. Indexing the threshold to inflation provides needed relief and restores fairness for community-based credit unions,” said America’s Credit Unions President/CEO Scott Simpson. “Debit interchange revenue at credit unions is reinvested into lower fees, better rates, fraud prevention, and improved services for members. When outdated thresholds reduce those resources, it is working families and small businesses who feel the impact.

“This legislation is an important step forward. But the only real long-term solution is full repeal of the Durbin Amendment. Government-imposed price controls have distorted the market and failed to deliver promised savings to consumers. While most credit unions were supposed to be protected from the impact of the Durbin Amendment, the fact is that those provisions did not work, and all have felt the negative impacts. Repeal would ensure credit unions can continue delivering affordable, secure financial services without artificial caps that miss their mark,” he added.

Jim Phelps, executive vice president and chief advocacy officer at Cornerstone League, said "Cornerstone League appreciates Sens. Cruz and Britt for recognizing that static thresholds written more than a decade ago do not reflect today’s economic reality. Indexing the Durbin Amendment asset cap to inflation is a practical step that helps ensure community banks and credit unions can continue investing in service, technology, and access for the consumers, small businesses, and local communities they serve.”

“Indexing the Durbin threshold to inflation is a practical step to limit the reach of outdated price controls that have ultimately raised costs and reduced benefits for Americans,” said Samantha Beeler, president of The League of Credit Unions & Affiliates. "Senator Britt has been a strong and consistent partner to credit unions on this issue, and we appreciate her leadership alongside Senator Cruz in introducing a targeted solution that supports credit unions in doing what they do best - providing affordable, secure financial options for their members and communities."