In our latest Liberty Update, we highlight how Americans have soured on "Bidenomics" despite Biden supporters…
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Image of the Day: Minorities Prospered Far More Under Trump

In our latest Liberty Update, we highlight how Americans have soured on "Bidenomics" despite Biden supporters' ongoing insistence that voters trust them rather than over three years of actual, real-life experience and hardship.  Well, our friends at the Committee to Unleash Prosperity have highlighted another point that merits emphasis as minorities turn against Biden in his reelection effort.  Namely, they prospered far more under President Trump than President Biden:

[caption id="" align="alignleft" width="691"] Minorities Prospered Far More Under Trump Than Biden[/caption]


June 09, 2024 • 10:40 PM

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When Even Barney Frank Sings the Praises of Free Markets, We Must Listen Print
By Timothy H. Lee
Wednesday, May 29 2013
In addition to Barney Frank, several other key leaders have since called for the repeal of the Durbin Amendment.

This article was originally published by Forbes on May 28, 2013.

Three years ago this month, in the wake of financial bailouts and anti-Wall Street hysteria in Washington D.C., Senator Dick Durbin (D-IL) introduced a destructive amendment that bears his name to the Dodd-Frank Wall Street Reform and Consumer Protection Act.  With little discussion and no debate on the floor to examine its likely consequences and externalities, the Durbin Amendment passed 64-33, with 17 Republicans voting in its favor.

How disastrous has the Durbin Amendment proven?  Well, even Barney Frank, the famously hyper-regulatory coauthor of Dodd-Frank itself, acknowledged that the amendment harms consumers rather than helps them.  Frank also supported legislative measures to revisit it, adding, “I believe that a free market approach in this area will be better for the economy and all concerned parties than the current system.”

When Barney Frank sings the praises of the free market as a superior alternative, it speaks volumes.

By way of primer, what the Durbin Amendment added to the broader Dodd-Frank law were price controls on debit card interchange fees, in the name of increasing competition in payment processing.  The limits ostensibly apply to banks with over $10 billion in assets, which would have to charge debit card interchange fees “reasonable and proportional to the actual cost” of processing transactions, but that hasn’t immunized smaller banks and credit unions in practice.  The Durbin Amendment also handed the Federal Reserve the power to regulate debit card interchange fees.  Unfortunately, the language of Dodd-Frank forced the Fed to consider only the marginal cost of transactions when setting debit card interchange rates, rather than the overall cost of building, maintaining and improving the network.  Consequently, the fee caps were set at an artificially low rate.

As a result of the Durbin Amendment, which cost banks over $8 billion in the first year alone, consumers have witnessed the disappearance of free-checking accounts, and suffered an onslaught of additional bank fees.  Local credit unions and small community banks (supposedly “exempt” from the amendment) have continued to see an alarming rate of foreclosures, and local economies have continued to suffer.  Additionally, consumers have yet to see savings at the check-out line – the original intent of the amendment in the first place.  Rife with unintended consequences, the Durbin Amendment is a perfect example of public policy gone wrong.

In addition to Barney Frank, several other key leaders have since called for the repeal of the Durbin Amendment.  Representatives Jason Chaffetz (R-UT) and Bill Owens (D-NY) introduced bipartisan legislation in 2011 to repeal it, but that bill (H.R. 3156) died in Congress after it was referred to committee.  Several free-market groups have also voiced their support to Washington for such a repeal initiative.

All of these consequences and calls for repeal provoke the question as to why the Durbin Amendment remains in effect today. With bipartisan support from both sides of the aisle and third-party groups weighing in with additional consequences for consumers, why has Congress failed to correct this egregious mistake in policy? Other provisions of Dodd-Frank have been repealed, but the Durbin Amendment continues to burden small banks, bank customers and retail consumers today.

One answer to that riddle is the persuasive lobby in Washington from large retailers.  Those retail giants, who reaped large benefits from the amendment’s passage, have yet to pass these savings onto their customers.  Consumer savings was the original basis for the amendment, but in the end American citizens on Main Street have suffered.

Big-government legislation such as Dodd-Frank always has unintended consequences.  What determines our efficacy as a democracy, however, is our ability to recognize and correct course when it has gone awry.  Congress has the ability to do just that.  In the meantime, another anniversary passes, and American consumers continue to lose.

This article was originally published by Forbes on May 28, 2013.  To view the article on, click here.

Notable Quote   
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