In JPMorgan’s annual letter to shareholders, CEO Jamie Dimon took retailers to task for pushing for regulations that limit their share of transaction costs.
“It is unfortunate that retailers and banks have been in a battle for years over who should bear the cost of processing money—and that retailers continue to use ‘lawfare’ to get their way,” he wrote.
The regulation in question is the Durbin Amendment or Regulation II, which was enacted as part of the Dodd-Frank Act in 2010. The law sets standards for determining if a debit card interchange fee is “reasonable and proportional to the costs incurred by the issue with respect to the transaction,” according to the Federal Reserve.
Regulation II cut average debit revenues in half from approximately $130 to $60 per transaction, according to Dimon. In his letter, he said that lower balance accounts cost more to maintain than they generate in revenue, and the regulations have made it harder for the bank to recoup.