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House GOP gives up on repealing Durbin rule

House GOP gives up on repealing Durbin rule

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Old May 25, 17, 8:31 am
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House GOP gives up on repealing Durbin rule

Not good news for anyone that was hoping repeal/reform of debit interchange limit might bring back debit rewards cards. From Politico:

House Republican leaders will drop language from a sweeping bank deregulation bill that would have eliminated a cap on debit card swipe fees, handing a major victory to retail lobbyists who spent months trying to kill the provision.

GOP leaders decided to remove the proposal from the nearly 600-page Financial CHOICE Act after confirming Wednesday that it threatened support for the rest of the bill, multiple senior Republican sources familiar with the matter said.

More: http://politi.co/2qXosW1
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Old May 25, 17, 9:11 pm
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Thank the lord for small favors.
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Old May 26, 17, 12:54 am
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the only reason MS has a place is because debit transaction fee is capped. why is this not a good news?
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Old May 26, 17, 7:22 am
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Originally Posted by wowcheesestick View Post
the only reason MS has a place is because debit transaction fee is capped. why is this not a good news?
You've got it sort of correct. The only reason prepaid VGC/MC have to allow pin transactions is because of Durbin.

BUUUUUT prior to Durbin, with uncapped debit rates there were some AWESOME debit cards that earned miles directly for pin purchases.
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Old May 26, 17, 8:11 am
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This is a huge win for MS actually. The Durbin amendment is two-fold (among other things):

1) Caps debit interchange fees
(Technically bad for this community, as it kills high-earning debit card offerings)

2) Requires dual-network acceptance for all Visa/Mastercard cards
(Wonderful for this community, as it requires giftcards to have PINs)

I'm happy about it.
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Old May 26, 17, 11:37 am
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I'll take earning points and miles with any airline/hotel of my choosing vs a few debit cards that can earn miles. Repealing durbin would've been a disaster.
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Old May 26, 17, 12:42 pm
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Originally Posted by Fly1Away1 View Post
I'll take earning points and miles with any airline/hotel of my choosing vs a few debit cards that can earn miles. Repealing durbin would've been a disaster.
Yeah without pin-gift cards 95+% of us would be out of this game. Being able to MS spend so we can churn thousands-unlimited (capped by cards approval) sign up bonuses is way more profitable than whatever rewards we'd get as a percentage of organic spend.
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Old May 26, 17, 1:19 pm
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Originally Posted by NoonRadar View Post
Yeah without pin-gift cards 95+% of us would be out of this game. Being able to MS spend so we can churn thousands-unlimited (capped by cards approval) sign up bonuses is way more profitable than whatever rewards we'd get as a percentage of organic spend.
Yes this is very good news. I'm surprised more people aren't cheering. The hobby lives on.
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Old May 26, 17, 2:06 pm
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Originally Posted by digitalpop View Post
(Wonderful for this community, as it requires giftcards to have PINs)
Durbin does not require gift cards to have PINs.
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Old May 26, 17, 3:10 pm
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Originally Posted by Alcibiades View Post
Durbin does not require gift cards to have PINs.
This. The Durbin amendment was ONLY about limiting swipe fees, NOTHING to do with requiring GCs to have PINs. I still view it as a net negative, from both a MS perspective and, more generally, unneeded price fixing by the govt.
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Old May 26, 17, 4:58 pm
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A quick google lookup seems to suggest the Durbin amendment does have to do, among other things, with prepaid/gift cards having a pin https://www.aba.com/Issues/Documents...salSummary.pdf

I only skimmed through the article so not professing it is so. In any case, to me the most important part isn't the name of the senator who proposed the amendment but the great opportunities it opened up for people in this hobby, not only for travel but cash back also.
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Old May 27, 17, 10:15 pm
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Originally Posted by Fly1Away1 View Post
Yes this is very good news. I'm surprised more people aren't cheering. The hobby lives on.
+1
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Old May 28, 17, 8:20 am
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Originally Posted by Alcibiades View Post
Durbin does not require gift cards to have PINs.
Originally Posted by tuphat View Post
This. The Durbin amendment was ONLY about limiting swipe fees, NOTHING to do with requiring GCs to have PINs. I still view it as a net negative, from both a MS perspective and, more generally, unneeded price fixing by the govt.
Actually that's incorrect... the Durbin Amendment is specifically the reason giftcards must have PINs.

The Durbin Amendment requires all issued bankcards to have at minimum (2) available unaffiliated card networks with which to process transactions. This has resulted in giftcards having a signature-based network and an unaffiliated PIN-based network.
Dodd-Frank Act - Section 1075, Durbin Amendment - Section 920 - "REASONABLE FEES AND RULES FOR PAYMENT CARD TRANSACTIONS" - Section (b) "LIMITATION ON PAYMENT CARD NETWORK RESTRICTIONS"
https://www.cfpbmonitor.com/wp-conte...12/Title-X.pdf

"NO EXCLUSIVE NETWORK.—The Board shall, before the end of the 1-year period beginning on the date of the enactment of the Consumer Financial Protection Act of 2010, prescribe regulations providing that an issuer or payment card network shall not directly or through any agent, processor, or licensed member of a payment card network, by contract, requirement, condition, penalty, or otherwise, restrict the number of payment card networks on which an electronic debit transaction may be processed
to—
(i) 1 such network; or
(ii) 2 or more such networks which are owned,
controlled, or otherwise operated by —
(I) affiliated persons; or
(II) networks affiliated with such issuer."
So.. dropping Durbin Amendment repeal saves our precious PIN-enabled giftcards. This is a huge win!
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Old May 28, 17, 4:35 pm
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Originally Posted by digitalpop View Post
Actually that's incorrect... the Durbin Amendment is specifically the reason giftcards must have PINs.

The Durbin Amendment requires all issued bankcards to have at minimum (2) available unaffiliated card networks with which to process transactions. This has resulted in giftcards having a signature-based network and an unaffiliated PIN-based network.
That is true in a sense, although it would be theoretically possible for issuers to comply with the Durbin Amendment by enabling their cards to run on two unaffiliated signature-based networks, for example Visa and Discover. I don't think they would want to do that for competitive reasons, however.
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Old May 29, 17, 2:35 pm
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The Durbin Amendment no where requires gift cards to have PINs.

Federal Reserve interpretation of the Durbin Amendments suggested that added PIN capability was one method to satisfy other requirements.

Last edited by Alcibiades; May 29, 17 at 2:40 pm
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