As many of you know, Russell Simmons and GlobalGrind have been working tirelessly over the past few weeks to try to make sure that a piece of legislation that is part of the Wall Street reform does not have unintended consequences that will have a drastic affect on the poor. The Durbin Amendment was passed in the Senate a few weeks ago with no hearings, no discussion and no explanation on how the poor would be protected.
In this amendment, the author, Sen. Durbin (D-IL), believes that a merchant should no longer pay a fee to Visa or Mastercard when a customer uses a debit card. Right now, the merchant pays a small percentage of the sale (1-2%) to Visa/Mastercard, which is called the ‘swipe fee.’ Durbin contends that no longer having to pay a ‘swipe fee’ will save the merchant a lot of money, and in turn, the merchant will pass on those savings to the customer by reducing the prices of what the merchant sells. Now, if you are like us, you would think that there is no way a merchant is going to save money and then pass on those savings to the customer…they are just going to pocket that money and the customer will be screwed. Why screwed? Cause, by doing this, it will cause the issuers of the debit cards to raise their fees to cover the loss income from the ‘swipe fees.’ And the bad part about all of this, is the amendment only goes after debit cards. And who uses debit cards? People who cannot get credit cards and/or who do not want credit cards, and most of those people are lower-income families. We believe that Sen. Durbin has good intentions, but unless this is thought out more, there are potentially some very tragic unintended consequences of this bill that will seriously hurt the poor. This morning ABC News reported on this, with a headlines that reads: ‘Proposed New Debit Card Rules May Not Help Consumers Much.’
Speaking with Russell this morning he mentioned that ‘Most recently, we learned too late that the government was making more money from people losing their homes…and these were mistakes made by unsophisticated lawmakers. With foresight, because of the business that I operate, I can see that the unintended consequences of this bill are real and we must not make the same mistakes at the expense of the poor.’
We do not have much time before the Congress votes on this bill. We are looking at a 48 hour window, so we need all the help we can get to ensure that the Durbin Amendment does not reform Wall Street by hurting Main Street.
Please call the following Congressional Members and tell them, ‘no to the unintended consequences of the Durbin Amendment. Protect the poor!’
Senator Richard Durbin (202) 224-2152
Congressman Gregory Meeks (202) 225-3461
Congresswoman Carolyn Maloney (202) 225-7944
Congressman Barney Frank (202) 225-5931
Congressman Mel Watt (202) 225-1510
Congresswoman Maxine Waters (202) 225-2201
-Michael Skolnik | Political Director to Russell Simmons | Co-Pres., GlobalGrind.com