January 1, Durbin’s Credit Card Bill: Walmart and Amazon Profiting While American Families Suffer

In these increasingly challenging times, American households are grappling with soaring prices and relentless inflation. The rising costs of everyday essentials have put strain on family budgets – a scenario made worse by greedy corporate retailers increasing their profit margins at the expense of hardworking Americans. Big names like Amazon, Walmart, and Target continue to fatten their wallets, showing little concern for the financial struggles of ordinary people.

The middlemen in this scheme? Senators Dick Durbin (D-IL) and Roger Marshall (R-KY). These politicians are fervently championing their proposed credit card legislation, a bill that would impose government regulations on the handling of credit card transactions. These mandates would shift the current system to allow retailers to process their credit card transactions via cheaper, yet unproven networks.

Durbin and Marshall’s corporate buddies – the ones running mega-retailers – stand to reap significant profits from these mandates. Yet, there is little initiative from these companies to pass on any savings to their dedicated customers. Unfortunately, the collateral damage from this proposed change will be felt by the regular American. Banks often rely on card transaction interchange to fund loyalty rewards, data protection measures, and other consumer-centric programs.

Senator Durbin’s track record paints a grim picture. The Durbin Amendment, passed by Congress in 2010, directed the Federal Reserve to limit debit card purchase interchange – a move that handed billions of dollars to hefty corporate retailers. Despite assurances that consumers would reap the benefits, a Federal Reserve Bank of Richmond study indicated that over 98% of businesses either increased or maintained their prices following the interchange adjustment. A separate University of Chicago study estimated that families lost approximately $25 billion following the enactment of the 2010 Durbin Amendment.

The Federal Trade Commission (FTC) recently unveiled a report underlining how grocery giants exploited the COVID-19 crisis to inflate essential item prices and augment profits. The findings revealed that retail grocery stores such as Kroger, Walmart, and Amazon experienced a more than 6% revenue increase above spending costs in 2021 and over 7% in 2023. This was a notable gain in profit as compared to their previous peak profit of 5.6% in 2015. The FTC report emphasised that these findings contradict the retailers’ claims of alignment between their rising prices and costs.

Despite awareness of the financial hardships consumers faced, these retailers chose to raise prices. The question remains, when will the exploitation of American families cease?

Durbin’s credit card legislation threatens to inflict further injury on struggling Americans. This proposed law offers ample evidence of how these corporate behemoths will exploit any opportunity to boost their profits, even if it means hurting you and your family. We’ve witnessed Durbin’s destructive influence before. It’s high time we shatter the vicious cycle and protect American families from bearing the brunt of these damaging policies.

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