Justin Sykes

CFPB Prepaid Card Rules Will Harm Consumers and Should be Repealed

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Posted by Justin Sykes on Friday, April 21st, 2017, 2:38 PM PERMALINK

In the fall of 2016 the Consumer Financial Protection Bureau (CFPB) issued final rules on prepaid debit cards, now set to go into effect April 1st of 2018. As is the case with most CFPB rule makings, the rule on prepaid debit cards will actually harm the same consumers it was originally designed to “protect.” Over 23 million Americans use and rely on prepaid cards, yet if the CFPB’s rule goes into effect, those same consumers will be pushed out of the market, depriving them of access to basic banking services.   

Since enactment of the Dodd-Frank Act, and resulting myriad of regulations, many banks have found it no longer advantageous or feasible to offer free checking accounts, and have alternatively increased fees and required higher minimum balances in order to maintain free checking accounts. This in turn pushed many financial consumers, which tend to be low-income, out of the traditional banking system.

Many of the consumers that lost their free checking accounts or were no longer able to afford them turned to alterative financial products, such as prepaid debit cards, which serve a similar function as traditional bank accounts. Prepaid cardholders can have their paychecks directly deposited onto the cards in much the same manner as standard debit card and checking account arrangements.

In recent years prepaid cards have grown in popularity because they are often cheaper than traditional account linked debit cards, which is why they are often preferred by low-income users. In fact, the amounts placed on prepaid cards have grown from $1 billion in 2003 to a projected $112 billion for 2018.

According to a 2014 report from The Pew Charitable Trusts, of an estimated 23 million consumers using prepaid cards, a quarter of those were low-income Americans, with a third having annual income below $15,000. Obviously these numbers reflect that if the CFPB prepaid card rule moves forward, low-income Americans will bear the brunt of the impact. This will likely increase the amount of “unbanked” Americans, which already number in the millions.

Additionally, as pointed out in a recent piece from the American Action Forum (AAF), according to the CFPB’s own estimates the prepaid rules will result in 137,642 one-time burden hours for prepaid card companies forced to comply, and another 19,494 ongoing burden hours.

AAF estimates that the rules will costs prepaid card companies $5,257,935 just to get into compliance with the rule, in addition to another $744,697 annually just to maintain compliance. Such costs will inevitably be passed onto consumers, depriving even more of needed banking services.

Thankfully, this year the House and Senate introduced joint resolutions of disapproval of the CFPB’s prepaid card rule pursuant to the Congressional Review Act. H.J. Res. 73 was introduced in the House by Rep. Roger Williams (R-Texas) and S.J. Res. 19 was similarly introduced in the Senate by Senator David Purdue (R-Ga.). 

Lawmakers on Capitol Hill should support these common sense measures that will protect American consumers, especially those of limited means, that rely on and prefer prepaid debit cards. This will not only increase choice for consumers but will ensure that those who have been pushed away from traditional banking products and services will have access to alternative financial services such as prepaid cards.  

 

Photo credit: Paul Istoan

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ATR Statement Supporting Chairman Hensarling's Financial CHOICE Act

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Posted by Justin Sykes on Thursday, April 20th, 2017, 11:04 AM PERMALINK

ATR President Grover Norquist issued the following statement today in support of House Financial Services Committee Chairman Jeb Hensarling’s release of the Financial CHOICE Act:

“Americans for Tax Reform supports Chairman Hensarling’s efforts to reform the costly and burdensome Dodd-Frank Act with his release of the Financial CHOICE Act this week. Chairman Hensarling has consistently been a champion for financial consumers and reforming Dodd-Frank. The Financial CHOICE Act looks to deliver reforms that will replace the misguided regulatory burdens imposed on America’s financial consumers and small financial institutions by the Obama Administration. 

“Under President Obama Americans saw the role of government in the market increase exponentially with the Dodd-Frank Act. While Dodd-Frank was supposed to target Wall Street, impacts of the law have instead fallen heaviest on Main Street, reducing small business lending, shuttering credit unions and community banks, and growing the number of unbanked Americans.

“Chairman Hensarling’s Financial CHOICE Act will increase accountability from financial regulators and protect American consumers while also fostering economic growth. The Financial CHOICE Act seeks to rein in ‘regulatory taxes’ imposed by Dodd-Frank that have served only to burden consumers with increased fees and reduced products and services. 

“The Financial CHOICE Act also gives much needed relief to America’s credit unions and community banks, which have been crushed by compliance costs in recent years, with an average of one institution being shuttered daily. The Act also repeals the failed Durbin Amendment and the Department of Labor’s Fiduciary Rule, both of which will benefit financial consumers. 

“I look forward to working with Chairman Hensarling on this pro-consumer, pro-growth legislation, that ensures American consumers and taxpayers are protected, while also fostering a regulatory climate that allows business to grow and prosper.” 

 

Photo credit: Gage Skidmore 


New Study Shows Durbin Amendment is a Failure

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Posted by Justin Sykes on Friday, April 14th, 2017, 11:46 AM PERMALINK

Passed as part of the Dodd-Frank Act in 2010, the Durbin Amendment was touted as a measure to benefit America’s retail consumers. The goal of the Durbin Amendment was to reduce the costs of interchange fees that retail merchants pay for debit card transactions with the hope that those costs savings would be passed onto consumers. Roughly six years later however studies show consumer costs have not been reduced and also that retail merchants are less concerned with reduced fees and more with receiving benefits and flexibility in interchange transactions.

Most American consumers are likely not aware of the process that goes into debit card transactions with their local retail stores. In fact, most consumers likely are not aware of the Durbin Amendment and the interchange fees it sought to cap. Yet the process and costs of using debit cards is something that effects millions of Americans on a daily basis as well as the merchants with whom they are transacting.

To put it simply, interchange fees are the fees paid by retail merchants to financial institutions for the privilege of accepting debit card payments in their stores. As mentioned, Durbin set a cap on the interchange fees financial institutions were allowed to charge merchants for the privilege of processing debit transactions.

In passing Durbin, proponents claimed that not only would consumers see reduced prices in stores but that merchants’ themselves would prefer and benefit from reduced interchange fees. The problem with such claims by Durbin proponents though is neither has proven to be true since enactment.

According to a study by the Federal Reserve Bank of Richmond in conjunction with Javelin Strategy & Research, since enactment of the Durbin Amendment 75 percent of the merchants surveyed in the study reported no price reduction as a result of the regulation. In fact, of the merchants surveyed 23 percent had actually increased prices on consumers since Durbin passed.

As to the second claim, that merchants’ primary concern was on reducing interchange fees, new findings show the majority of small merchants are actually more concerned with preserving the benefits they receive from increased flexibility and choice in the partnerships they hold with financial institutions. This stems from the fact that the agreements merchants reach with financial institutions for debit card processing often provide the merchants with benefits that outweigh any reduction in fees they pay.

A new study released in April of this year by Javelin Strategy & Research found that for America’s small merchants, “value is a more significant factor than price when it comes to satisfaction with debit interchange fees and partnerships” with financial institutions.

That is to say merchants want more flexibility and options stemming from the benefits they receive from partnerships with financial institutions for processing, and when fees are capped under Durbin the benefits offered to merchants from such partnership agreements are diminished.

The April study surveyed 500 small merchants, those with annual sales between $250,000 and $10 million, and concluded that “small merchants want choice and flexibility more than low prices” on interchange fees paid. In fact, more than four in five merchants surveyed were satisfied with the transparency and value they get from their debit card payment processors and of the merchants who were not satisfied just one-quarter believe interchange fees hurt their profitability.

Even more revealing is that the study found over sixty percent of small merchants were unfamiliar with the details surrounding federal efforts to cap debit interchange fees under Durbin. Clearly the narrative from Durbin supporters that capping interchange fees would be a benefit and preference for merchants is mischaracterized and for the most part wholly misleading. 

Thus over six years since enactment of the Durbin Amendment, the two driving justifications for enactment of price caps on interchange fees are proving false.

Small merchants not only prefer choice and flexibility in their partnerships with financial institutions, which are increased when prices are not capped, but prefer such benefits over reduced prices. Furthermore, the price savings consumers were supposedly guaranteed under Durbin have not come to fruition, and even worse a number of merchants have increased prices despite the Durbin price caps.  

Lawmakers in the 115th Congress should keep in mind these two failed outcomes when considering Durbin Amendment repeal, and know that the benefits to consumers and merchants promised under Durbin have been an overwhelming failure. 

 

Photo credit: Paul G

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Norquist Praises Trump Executive Orders Rescinding Obama-era Energy Regulations

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Posted by Justin Sykes on Tuesday, March 28th, 2017, 12:14 PM PERMALINK

ATR President Grover Norquist issued the following statement in support of President Donald Trump’s release of his executive order on energy independence that will halt a number of costly Obama-era regulations such as the former President’s signature Clean Power Plan:

“President Trump’s release this week of his executive order on energy independence is a positive step towards rolling back a number of Obama-era regulations which would have had drastic economic impacts on the U.S. with little to no environmental benefits. 

“The President’s executive order will halt past regulations such as President Obama’s Clean Power Plan, but will also look to create a framework to encourage U.S. energy production and independence moving forward.

“Under President Obama Americans witnessed a massive increase in the regulatory state and executive overreach that deterred innovation while driving up the cost of energy in the U.S. for taxpayers and businesses while providing no real environmental impacts.

“For instance the President’s executive order will begin rolling back the Clean Power Plan, which would have increased electricity rates by double-digits in 44 states while killing thousands of jobs and decreasing U.S. competitiveness. 

“Trump’s order will also require reviews of other costly and duplicative Obama energy policies such as the Bureau of Land Management’s rules on methane emissions and the Interior Department’s moratorium on new coal leasing on federal land.

“I applaud President Trump’s for his leadership rolling back anti-energy Obama policies and his work to encourage U.S. energy production and independence.”

 

Photo credit: Gage Skidmore

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ATR Supports H.J. Res. 59 and S.J. Res. 28 Blocking EPA's RMP Rule

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Posted by Justin Sykes on Thursday, March 9th, 2017, 12:01 PM PERMALINK

Americans for Tax Reform (ATR) President Grover Norquist this week sent a letter to Congressional lawmakers urging support for Congressman Markwayne Mullin's H.J. Res. 59 and Senator Jim Inhofe's S.J. Res. 28. 

Both resolutions would use the Congressional Review Act to block the Environmental Protection Agency's (EPA) new rules relating to the Agency's Risk Management Plan Program (RMP), put forth under President Obama last year. The new RMP rule would increase an already excessive compliance burden and jeopardize the safety of over 12,500 U.S. chemical facilities. 

Below is the text of the letter to Congress, which can also be found here

March 9, 2017

The Honorable Paul Ryan
Speaker
U.S. House of Representatives
Washington, DC 20515

The Honorable Mitch McConnell
Majority Leader
U.S. Senate
Washington, DC 20510

Dear Speaker Ryan and Majority Leader McConnell:

On behalf of Americans for Tax Reform (ATR) I write to express ATR’s strong support for using the Congressional Review Act to repeal the Environmental Protection Agency’s (EPA) new regulatory requirements relating to the Agency’s Risk Management Plan Program (RMP). 

While increased safety is a laudable goal, the changes to the RMP put forth by the EPA under President Obama fall short of achieving this goal in a sensible and cost effective manner. Instead, the changes put forth to the RMP could actually jeopardize the safety of U.S. chemical facilities and grow an already costly compliance burden.

The EPA’s new RMP rule is redundant and would add to an already excessive compliance burden. The new rule would also jeopardize safety by requiring U.S. facilities that handle hazardous materials to publicly disclose sensitive facility-specific information regarding the chemicals present at a certain facility and any relating operational information.

Such disclosures would be available to any member of the public upon request, and the new rule would prevent facilities from denying access or using any sort of vetting process to ensure the release of sensitive information will not be used to endanger the public or compromise national security.

The existing RMP has already proven successful by driving down accidents at chemical facilities by almost 60 percent since its implementation two decades ago. With the new rules set to take effect March 21 of this year Congress must act quickly.

In the House Congressman Markwayne Mullin has introduced H.J. Res. 59 and Senator Jim Inhofe has introduced S.J. Res. 28 in the Senate. Both of these resolutions would use the Congressional Review Act to block the EPA’s new RMP rule.

I urge you and your colleagues in Congress to support both H.J. Res. 59 and S.J. Res. 28 and use the authority granted under the Congressional Review Act to prevent the enactment of the new RMP rule.

Sincerely,                                 

Grover G. Norquist                                                      
President                                                                     
Americans for Tax Reform

 

Photo credit:  55thStreet

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ATR Opposes Rhode Island Carbon Tax (S. 365)

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Posted by Justin Sykes on Wednesday, March 1st, 2017, 2:45 PM PERMALINK

Americans for Tax Reform (ATR) sent the following letter to the Rhode Island General Assembly today urging state lawmakers to oppose Senate Bill 365, the "Energize Rhode Island: Clean Energy Investment and Carbon Pricing Act" of 2017. 

Senate Bill 365 would impose a $15 per ton carbon tax in the state of Rhode Island that would increase $5 annually. Rhode Island lawmakers should oppose this costly and burdensome tax hike proposal which will increase the state's already high tax burden on businesses and consumers, and drive up energy costs for residents and businesses in the Ocean State.

Below is the full text of the letter, which can also be found here.

March 1, 2017

State of Rhode Island General Assembly
82 Smith Street
Providence, RI 02903

Dear Members of the Rhode Island General Assembly:

On behalf of Americans for Tax Reform I urge you to oppose Senate Bill 365, the “Energize Rhode Island: Clean Energy Investment and Carbon Pricing Act” of 2017, introduced by Senators Jeanine Calkin, Ana Quezada, James Seveney, Harold Metts, and Frank Lombardo.

Senate Bill 365 would impose a carbon tax on energy in the state at a rate of $15 per ton of emissions that will increase by $5 annually. Such a tax will reduce the state’s economic competitiveness by driving up the cost of energy, impacting jobs and increasing costs for Rhode Island’s most vulnerable.

Rhode Island’s tax climate was recently ranked 44th worst in the U.S. by the bipartisan Tax Foundation’s 2017 State Business Tax Climate Index, with some of the highest corporate, individual, and property tax rates in the country.

Rhode Island’s gas tax in 2016 was also ranked as the 9th highest in the country at 34 cents per gallon, on top of the federal rate of 18.4 cents. Estimates show Senate Bill 365 would add an additional tax of 15 cents per gallon of gas.

Studies show a carbon tax rate of $20 per ton in Rhode Island would result in the loss of worker income equivalent between 2,000 and 5,000 jobs, and would increase the cost of using natural gas in the state by 40 percent. Such an increase would drive up the cost of doing business in the Ocean State, and hit low-income households the hardest who spend a larger portion of their monthly income on energy costs.    

I urge all members of the Rhode Island General Assembly to oppose Senate Bill 365. 

Sincerely,                               

Grover G. Norquist                                                     
President                                                                   
Americans for Tax Reform

 

Photo credit: Taber Andrew Bain   

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ATR Joins Coaliton Urging Durbin Amendment Repeal

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Posted by Justin Sykes on Friday, February 10th, 2017, 9:49 AM PERMALINK

Americans for Tax Reform this week joined a coalition of free market organizations urging House Financial Services Committee Chairman Jeb Hensarling to maintain provisions repealing the Durbin Amendment in the Financial CHOICE Act moving forward.

The Durbin Amendment was enacted as part of the Dodd-Frank Act and was touted as a benefit to consumers. However, since enactment the Durbin Amendment has failed to deliver the promised benefits to consumers, and has instead led to reduced access to traditional banking services and driven up the number of "unbanked" Americans. 

The coalition letter states, "The burdensome costs of the Durbin Amendment, like so many other ill-conceived regulations born of Dodd-Frank, have become fully clear with the passage of time. This gives the 115th Congress a crucial to opportunity to enact reform...We therefore urge you you to keep the provision repealing the Durbin Amendment in the new version of the bill." 

The full letter can be found here.  

 

Photo credit: John Griffiths

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ATR Releases Coalition Letter Opposing the Postal Service Reform Act (H.R. 756)

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Posted by Justin Sykes on Monday, February 6th, 2017, 1:34 PM PERMALINK

Americans for Tax Reform, joined by 23 free market organizations, today sent an open letter to Congress urging lawmakers to oppose H.R. 756, the “Postal Service Reform Act of 2017” introduced by House Government Oversight Committee Chairman Jason Chaffetz (R-Utah), and the Committee’s Ranking Member Elijah Cummings (D-Md.).

Since 2007, USPS has posted more than $50 billion in losses and faces $125 billion in unfunded liabilities, despite an estimated $18 billion annually in indirect subsidies.

While reforms are needed, the Postal Service Reform Act ignores basic needed reforms to USPS, and instead increases rates, shifts USPS’s financial burden onto the American public, and allows for the diversion of resources away from the core mission of mail delivery.

Read the full letter below or here:

February 6, 2017

Open Letter to Congress:

Protecting Taxpayers and Consumers from Increased Rates, Ill-advised Reforms, and Further Exacerbation of the U.S. Postal Service’s Financial Hardships – Opposing the Postal Service Reform Act of 2017

To Members of the U.S. Congress:

We, the undersigned organizations, representing millions of taxpayers and consumers nationwide, urge Congress to oppose H.R. 756, the “Postal Service Reform Act of 2017” introduced by House Government Oversight Committee Chairman Jason Chaffetz, and the Committee’s Ranking Member Elijah Cummings.

For years, the U.S. Postal Service (USPS) has suffered from operational and financial inefficiencies, and while reforms are needed, H.R. 756 misses the mark and may actually exacerbate the issues facing USPS.

The USPS enjoys a monopoly on the delivery of first-class and standard mail and is exempt from state and local sales, income, and property taxes. The USPS also has the power of eminent domain, is not subject to local zoning ordinances, and has borrowed billions from the Treasury at subsidized interest rates.

Despite such special treatment, which is estimated to be $18 billion annually in indirect subsidies, USPS’s financial health is continually waning. Since 2007, USPS has posted more than $50 billion in losses and faces $125 billion in unfunded liabilities. Much of this stems from USPS’s inability to adapt to changing markets, congressional impediments, and union quagmires.

Many of the reforms provided for in H.R. 756 lead USPS further away from the core mission of mail delivery, unfairly shift the Postal Service’s financial burdens onto the American public, and fail to address many of the underlying issues facing USPS.

Postal Rate Reforms and Increases. Chairman Chaffetz’s reform bill would allow the Postal Service to increase rates by 2.15 percent on monopoly products such as stamps. Monopoly products generate the bulk of USPS profits. Increasing rates will only reduce revenue and further drive more consumers away from USPS products and services. 

Diversion to Nonpostal Products and Services. Key provisions contained in H.R. 756 would allow the Postal Service to divert resources away from the core mission of mail delivery to providing nonpostal products and services to state, local, and tribal governments and federal agencies. The Act creates a “Chief Innovation Officer” tasked with managing the development and implementation of nonpostal products. While intended to generate new sources of revenue, such provisions are only a point of distraction, and will see the Postal Service further competing with private firms.

Postal Service Governance Reform. The USPS Board of Governors is comprised of nine members, not including the Postmaster General and Deputy Postmaster General, who are Presidentially appointed and confirmed by the Senate and serve seven-year terms. Since 2015, the Board of Governors has had only one Governor serving due to congressional hurdles. H.R. 756 would reduce the USPS Board of Governors from a nine-member board to a five-member board. This hollow reform does nothing to actually improve USPS governance, and instead reinforces the fact that most of the provisions in the bill are simply reforms for the sake of reforms, having no real impact on the status quo.     

We recognize the need for reforming the U.S. Postal Service. However Chairman Chaffetz’s Postal Service Reform Act ignores basic needed reforms to USPS, and instead increases rates, shifts USPS’s financial burden onto the American public, and allows for the diversion of resources away from the core mission of mail delivery.

It is for these reasons that we ask members of Congress to oppose this legislation.  

Grover G. Norquist                                           
Americans for Tax Reform                                    

David Williams                                                
Taxpayers Protection Alliance                                                            

Jim Martin                                                        
60 Plus Association                                          

Phil Kerpen                                                    
American Commitment                                        

John M. Palatiello                                             
Business Coalition for Fair Competition                                                        

Norm Singleton                                                           
Campaign for Liberty                                             

Andrew F. Quinlan
Center for Freedom and Prosperity                                                                       

Jeffrey L. Mazzella                                            
Center for Individual Freedom                                   

Col. Francis X. De Luca                                                              
Civitas Institute                                                 
 

Tom Schatz                                                     
Council for Citizens Against Government Waste          

Chuck Muth                                                     
Citizen Outreach                                               

Katie McAuliffe                                              
Digital Liberty   

Adam Brandon
Freedom Works

George C. Landrith
​Frontiers of Freedom

Mario Lopez
Hispanic Leadership Fund

Sabrina Schaeffer
Independent Women's Forum

Andrew Langer
Institute for Liberty

Kory Swanson
John Locke Foundation

Seton Motley
Less Government

Willes K. Lee
National Federation of Republican Assemblies

Kevin Kosar
R Street Institute 

Karen Kerrigan
Small Business & Entrepreneurship Council

Ryan Alexander
Taxpayers for Common Sense

Judson Phillips
Tea Party Nation

 

Photo credit: MoneyBlogNewz                                                          

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ATR Supports the Agency Accountability Act (H.R. 850)

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Posted by Justin Sykes on Friday, February 3rd, 2017, 4:34 PM PERMALINK

Americans for Tax Reform this week released a letter to Congressional lawmakers urging support for Representative Gary Palmer's (R-Ala.) Agency Accountability Act (AAA), H.R. 850. 

Congress has granted agencies the authority to collect fines, fees, and other revenues outside of appropriated funds. While most of these funds are used to offset appropriations, a large portion are used by agencies to self-fund programs and operations outside of the normal appropriations process.

H.R. 850 would correct this discrepancy by requiring that all fines, fees, penalties, and other unappropriated proceeds, be directed to the Treasury, thus making them subject to the appropriations process. Agencies would still receive the funds required to exercise their standard functions, but those funds would now be placed back under Congressional oversight.

Below is the text of the letter, which can also be found here.

February 3, 2017

Dear Members of Congress,

Americans for Tax Reform (ATR) urges your support of H.R. 850, the Agency Accountability Act (AAA), introduced by Representative Gary Palmer (R-Ala.). Representative Palmer’s H.R. 850 would increase transparency and oversight of the funds collected by federal agencies and in doing so would help to restore Congress’s Article I authority by subjecting such funds to the appropriations process. 

Congress has granted agencies the authority to collect fines, fees, and revenue, with a portion of those funds being used to offset appropriations. However, some of these funds do not receive Congressional oversight as to how they are spent, leaving agencies to use those funds to finance programs and functions outside of the typical appropriations process. According to the Office of Management and Budget (OMB), in 2015 the federal government collected over $500 billion in user fees alone.

Congress’s “power of the purse” is thus being usurped as billions in annual revenue from fines and fees levied by federal agencies escapes the appropriations process. For instance, the Consumer Financial Protection Bureau (CFPB) and Financial Stability Oversight Council (FSOC) receive no appropriated funds from Congress. 

H.R. 850 would work to correct such discrepancies by requiring that all fines, fees, penalties, and other unappropriated proceeds, be directed to the Treasury, thus making them subject to the appropriations process. Agencies would still receive the funds required to exercise their standard functions, but those funds would now be placed back under Congressional oversight.       

H.R. 850 is a positive measure to increase Congressional oversight over the actions of federal agencies, thus improving the overall transparency and accountability of the federal government. 

I urge you to support and vote for H.R. 850, the Agency Accountability Act. 

Sincerely,                               

Grover G. Norquist                                                    

President                                                                     
Americans for Tax Reform

 

Photo credit: Jason Ippolito

  

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President Trump Should Target Durbin Amendment Repeal

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Posted by Justin Sykes on Friday, February 3rd, 2017, 1:01 PM PERMALINK

This week President Donald Trump is set to order a regulatory rollback for the financial industry with his sights set on the Dodd-Frank Act. As the Trump Administration begins taking action to relieve consumers and businesses of the massive Dodd-Frank regulatory burden, the Administration should begin with one of the most onerous and failed Dodd-Frank policies – the Durbin Amendment.

Passed as part of the Dodd-Frank Act, the Durbin Amendment allows the government to set price controls on fees for debit card transactions. Prior to enactment of Durbin, these fees were not capped, and issuers of debit cards, such as credit unions and banks, were encouraged by free market competition to offer consumers benefits, such as free checking accounts.

However since Durbin was passed, not only have free checking accounts and other consumer benefits disappeared, but so has access to the banking system for many low-to-middle income Americans.

Before Durbin was enacted in 2009, 76 percent of banks offered free checking accounts. After Durbin was passed, that number fell to 45 percent in 2011, 39 percent in 2012, and an all time low of 37 percent in 2015. As a result of this decline, many low-to-middle income Americans have been pushed out of the banking system. This has led to over 1 million Americans becoming “unbanked.”

Yet the regressive trends resulting from Durbin are not the only concerning outcome. In passing Durbin, proponents of the Amendment argued that consumers would receive the benefits of merchants receiving a fee break on debt transactions. However, almost zero of those benefits were passed along to consumers. 

Studies show that instead of consumers receiving price breaks as a result of the fee cap, 77 percent of merchants have not changed prices, while 22 percent have actually increased prices. Such unfulfilled promises only harm, not help, American consumers.

The Durbin Amendment has not only failed at its stated goal of benefiting the American consumer, but has actually achieved the exact opposite. Instead of consumers seeing price cuts, prices have stayed the same or increased, and Americans have been driven out of the banking system leading to millions becoming unbanked.

The Durbin Amendment is failed policy. Hopefully for the millions of unbanked Americans and consumers seeing costs rise, President Trump will act to right the ship and target the Durbin Amendment for repeal, before the ill-fated consequences of this terrible policy become even worse. 

 

Photo credit: Gage Skidmore

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