Durbin Seeks Warren’s Help To Combat Steering To Less-Regulated Products

U.S. Sen Dick Durbin, D-Ill., on Dec. 22 sent a letter to Elizabeth Warren, special advisor to the secretary of the treasurer and the person responsible for establishing the newly created Consumer Financial Protection Bureau, seeking her help to protect consumers from attempts to circumvent new payment card regulations “by pushing consumers to less-regulated products such as prepaid cards.”

The letter follows the Federal Reserve Board release of proposed regulations that would cap debit card interchange fees at 12 cents per transaction (see story). The Fed was directed to establish standards to ensure that debit-interchange fees are “reasonable and proportional” to the real cost of processing a debit card transaction by a bipartisan amendment Durbin included in the Dodd-Frank Wall Street Reform and Consumer Protection Act. Final regulations will be released in April.

Last week, Durbin and U.S. Sen. Bob Menendez, D-N.J., introduced legislation that would curb hidden fees associated with many prepaid debit cards (see story). The Prepaid Card Consumer Protection Act would “eliminate some of the most egregious hidden fees, increase fee transparency for consumers and increase consumer protections,” Durbin noted in a news release.