Hensarling’s reform plan would repeal Durbin price cap

House Financial Services Committee Chairman Jeb Hensarling, R-Texas, outlined an alternative to the Dodd-Frank Act that would include regulatory relief – including the repeal of “federal price controls” in the Durbin amendment – during a speech at the Economic Club of New York Tuesday.

Hensarling said his bill will “provide much-needed relief to community financial institutions that are being crushed by Washington’s ‘one-size-fits-all’ regulatory approach.” Titled the “Financial Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs (CHOICE) Act,” the draft bill also includes measures that would allow credit unions to appeal exam findings more easily.

NAFCU has staunchly opposed the Durbin amendment because the cap on interchange fees results in profits for retailers but no passed-on savings for consumers. The amendment required the Federal Reserve to set a cap on debit interchange fees charged by financial institutions with $10 billion or more in assets. The Fed’s final rule caps debit interchange transaction fees at 21 cents plus 1 basis point for fraud costs.

The draft bill would also address extended exam cycles for credit unions, replace the CFPB director position with a bipartisan, five-member commission and repeal indirect auto lending guidance.

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