WASHINGTON — U.S. Sens. Ted Cruz (R-TX) and Katie Britt (R-AL) have introduced the Community Bank Relief Act, legislation that would raise — and annually adjust for inflation — the $10 billion asset threshold that triggers federal limits on debit card interchange fees, according to reporting by Bloomberg.
Bloomberg reported that the proposal would revise the current Durbin Amendment framework by tying the asset threshold to the Consumer Price Index, including a retroactive adjustment dating back to the 2010 passage of the Dodd-Frank Act. The change is aimed at reducing regulatory pressure on smaller institutions that lawmakers say are increasingly being swept into rules originally aimed at much larger banks.
According to Bloomberg, Cruz — who chairs the Senate Commerce Committee — and Britt, who leads the Senate Banking Subcommittee on Housing, Transportation and Community Development, argue the existing threshold no longer reflects today’s economic realities. Cruz said the update would help community-based institutions avoid fee caps “intended for much larger institutions.”
“The Durbin Amendment was not designed for the current economic and regulatory reality,” Cruz said in a statement cited by Bloomberg. “My legislation modernizes the interchange fee cap to reflect inflation, helping small banks support local economies while lowering banking costs for Americans.”
Bloomberg also reported that Britt described the measure as “commonsense legislation.” While the bill would raise and index the asset threshold, the existing debit interchange fee cap — currently set at 21 cents plus 0.05% of a transaction — would remain unchanged.
Companion legislation has been introduced in the House by Rep. Andy Barr (R-KY).
CU Trades Comment
The Defense Credit Union Council said it supports the goals of the Community Bank Relief Act.
"For years, asset thresholds tied to debit interchange regulations have remained static, while compliance costs, cybersecurity demands, fraud mitigation investments, and operational expenses have increased significantly," said DCUC Chief Advocacy Officer Jason Stverak. "Updating those thresholds is a commonsense modernization effort that supports smaller, community-based financial institutions competing against the nation’s largest banks. However, we respectfully urge the sponsors to explicitly reference and include credit unions in the legislative language, just as community banks are specifically recognized."
Stverak noted that credit unions — including the defense credit unions that serve servicemembers, veterans, and their families — operate under the same debit interchange framework established by the Durbin Amendment and Regulation II.
"They face identical market pressures and regulatory obligations. Yet, federal legislation often references 'community banks' without clearly acknowledging that credit unions are equally mission-driven, member-owned cooperatives serving millions of Americans," he explained. "If Congress intends to provide meaningful relief to smaller financial institutions, that relief should be clearly and unequivocally extended to credit unions as well. Explicit statutory inclusion ensures parity, strengthens legislative clarity, and reinforces competitive equality across the financial marketplace."
Stverak added that DCUC stands ready to work with senators Cruz and Britt and representative Barr to strengthen the legislation so that it fully reflects the diverse institutions serving Main Street America — including the credit unions that support our nation’s military community.
America's Credit Unions President and CEO Scott Simpson noted that as credit unions grow by serving more members and keeping pace with the economy, "many are swept into limits that were intended for much larger institutions. Indexing the threshold to inflation provides needed relief and restores fairness for community-based credit unions. Debit interchange revenue at credit unions is reinvested into lower fees, better rates, fraud prevention, and improved services for members. When outdated thresholds reduce those resources, it is working families and small businesses who feel the impact.
“This legislation is an important step forward," continued Simpson. "But the only real long-term solution is full repeal of the Durbin Amendment. Government-imposed price controls have distorted the market and failed to deliver promised savings to consumers. While most credit unions were supposed to be protected from the impact of the Durbin Amendment, the fact is that those provisions did not work, and all have felt the negative impacts. Repeal would ensure credit unions can continue delivering affordable, secure financial services without artificial caps that miss their mark."