Illinois Senator Dick Durbin on Thursday sent a pointed open letter to the heads of Visa and MasterCard, accusing them of attempting to "frighten" small banks and credit unions with their public criticism of his proposed regulation of card interchange fees.
In the letter, the Democratic Senator said that the credit card issuers were willfully distorting the actual impact of the proposed amendment, adding that most of the negative consequences that the card issuers had hinted at would be exclusively caused by Visa and MasterCard.
Durbin wrote that "your companies are threatening to make changes to your small bank interchange fee rates and to your network operating rules. These changes, which are not in any way required by the amendment, are unnecessary and would disadvantage small card-issuing institutions."
Durbin's amendment would take effect as part of a larger omnibus financial reform bill currently under consideration by both houses of Congress.
While the bill is aimed at making the consumer finance industry more open and transparent, a recent poll shows that many Americans would prefer that the federal government take a more hands-off approach to regulating the sector.
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