There’s nothing quite like a interchange to stir the pot, and the Durbin Amendment has been a hot-button issue of the moment for our readers.

A story on a report showing how much the government spends on debit interchange fees ["New Report Adds Fuel to Interchange Debate"] spurred responses from two bankers (plus a consultant feeling the community banks' pain). And when the senator indicated there might be an exemption for government prepaid cards ["Durbin: Exemptions in Works for Prepaid Government Benefits Cards"] another Feedback item expressed disappointment in Sen. Durbin for cowing to banker pressure.

Wade Griffith, an IT officer at AmericanWest Bank in Spokane, found it "too bad that the government does not understand that PIN debit interchange can be negotiated." Alluding to Wal-Mart, he wondered, "Birds do it, bees do it, even folks from Bentonville, Ark., do it. Why can't Uncle Sam?"

Jack Hamilton, the CEO of Charles River Bank in Medway, Mass., wrote that "saving Treasury $39 million a year, when the country is running trillion-dollar deficits, is hardly justification for destroying the competitiveness of America’s community banks."

After venting frustration with the federal government for increased FDIC assessments, lost investments in Fannie Mae and mark-to-market accounting Hamilton asked, "Can't you cut the community bank world a break for a change and not blatantly try to force us all out of business?"

In response to the online posting of that feedback, Mary Beth Sullivan, a partner at Capital Performance Group, concurred. "At community bank CEO and director meetings this month, I've heard a common cry: the regulators are trying to force small banks out of business," she wrote. "Whether intentional (and many think it is intentional) or not, it is becoming difficult for smaller community banks to remain independent."

Was her comment part of what prompted Jim Wells of Wellspring Consulting to write "what a shame to see the incredible power of the banking lobby make Sen. Durbin blink on his debit card interchange amendment" after Durbin called government prepaid cards "a special-case situation"?

Wells seemed to fear for the overall fate of the amendment "if Congress lacks the gravitas to stop this greedy and abusive behavior, it should at least force MasterCard and Visa to disclose to their cardholders this hidden cost of using their cards."


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