U.S. Senators Ted Cruz (R-Texas) and Katie Britt (R-Ala.) have introduced the Community Bank Relief Act, a bill aimed at updating regulations that cap debit card fees for banks. The legislation proposes to raise the current $10 billion asset threshold, which determines which banks are subject to fee limits, and to adjust this threshold annually for inflation.
Senator Cruz stated, “The Durbin Amendment was not designed for the current economic and regulatory reality and subjects community banks to fee limits that the original language intended for much larger institutions. My legislation modernizes the interchange fee cap to reflect inflation, helping small banks support local economies while lowering banking costs for Americans.”
Senator Britt commented, “As we’ve seen in so many instances, countless regulations in the Dodd-Frank Act were not only onerous but set fixed thresholds that have become outdated over time, and the Durbin Amendment is no exception. The largest burden is on our smallest financial institutions who provide vital sources of credit to Main Streets that drive our local economies. This commonsense legislation would simply index, to both inflation and COLA, the outdated threshold in this provision of Dodd-Frank, ultimately providing relief for our community banks who were never intended to be burdened by this regulation.”
A companion bill has been introduced in the House by Representative Andy Barr (R-KY-6). Rep. Barr said, “The Durbin Amendment was sold as a win for consumers in the Dodd-Frank Act by Democrats. Instead, it’s hurt Kentucky’s community banks and credit unions that do so much for underserved communities by limiting their ability to grow and compete with larger financial institutions. I’m working with Senator Cruz to fix this — because Washington shouldn’t be picking winners and losers at the expense of our local banks and the families they serve.”
The bill has received backing from several organizations including Americans for Tax Reform, Independent Bankers Association of Texas, and Texas Bankers Association.
Grover Norquist, President of Americans for Tax Reform said, “Indexing the Durbin exemption cap to inflation prevents government price controls from expanding by default. Price controls on interchange were a mistake from the start. They have raised costs for cardholders, reduced benefits, and entrenched government interference in the payments market. Senator Cruz should be commended for his bill to fix the harms caused by Dodd-Frank.”
Chris Furlow, President and CEO of Texas Bankers Association said,“The success of the nation’s economy depends on healthy community banks that provide capital and critical financial resources for small businesses and families. We thank Sen. Cruz for the Community Bank Relief Act that will right-size regulation and help strengthen the ability of community banks to bolster local economies in Texas and across America.”
Christopher Willston, President and CEO of Independent Bankers Association of Texas added,“Indexing the Durbin threshold to inflation is a smart, targeted update that keeps community banks where Congress intended—outside the regulatory regime meant for the largest players. By directing the Federal Reserve to make both the initial catch-up adjustment and annual CPI updates, this amendment brings needed certainty and proportionality to the payments system. We appreciate Senators Cruz and Britt for their thoughtful leadership.”
The Durbin amendment was part of 2010’s Dodd–Frank Act; it authorized caps on debit card interchange fees charged by large issuers—currently about 22 cents per transaction—for those with assets above $10 billion. When enacted there were about 80 such banks; now approximately 130 exceed this threshold due mainly to asset growth over time.
The new legislation would raise this $10 billion limit based on annual cost-of-living adjustments measured by Consumer Price Index (CPI), allowing more community banks an exemption from these restrictions.
Senator Ted Cruz recently won re-election against Colin Allred in 2024 with 53.1% of votes compared to Allred's 44.6%.
