Durbin fires back at critic of interchange fee plan

In the letter, Durbin asks that his response be made available to JPMorgan Chase shareholders and customers. Dimon is scheduled to announce quarterly earnings during a conference call Wednesday morning. 

Dimon has regularly criticized the law, publicly calling it “counterproductive” and “price fixing at its worst,” Durbin said. 

Durbin said while he realized that Chase might experience a drop in revenue from the change in interchange fees, he reminded Dimon that the firm posted $17.4 billion in profits – up 48 percent from the previous year – and a 15 percent profit margin in 2010. 

He also pointed out that Dimon’s compensation increased to $20.8 million in 2010 “while middle-class American families are struggling to get by in a tough economy – an economy that went south because of the banking industry’s unregulated excesses.” 

“There is no need for you to threaten your customers with higher fees when you and your bank are already making money hand-over-fist,” Durbin wrote. “And there is no need to make such threats in response to reform that simply tries to spare consumers from bearing the cost of interchange fees that are anticompetitive and unreasonably high.” 

The provision that is part of the Dodd-Frank financial regulatory overhaul has pitted retailers against the banking industry. 

Led by Sen. Jon Tester (D-Mont.) a growing number of lawmakers and industry supporters are pushing a bill that would delay the provision included in the Dodd-Frank law that would drastically limit the amount banks can charge retailers for swiping debit cards.

The bill would require the Federal Reserve to stop writing rules implementing the measure, and call for a two-year study examining the impact of the provision on consumers, businesses and banks.

“Interchange reform is necessary and it is long overdue,” Durbin said. “In the coming weeks I am confident the Fed will produce a reasonable set of reforms that will enhance the efficiency, competitiveness and fairness of the debit system. This will neither be ‘counterproductive’ nor ‘idiotic.’ It will be good news for all Americans.”