Durbin Amendment

The “Durbin Amendment” to the Dodd Frank Wall Street Reform Act (Dodd-Frank Act Sec. 920)

The Dodd Frank Wall Street Reform Act was written to regulate financial institutions and financial transactions to increase transparency, accountability, and better protect and inform consumers.

The Durbin Amendment to the Wall Street Reform Act provided additional changes not part of the original house bill that governed credit card transaction fees and routing. The final version of Dodd-Frank was signed into law on July 21st, 2010.

The Durbin Amendment includes several provisions impacting the use of signature / debit cards including FSA/HRA cards linked to health care accounts. On June 30th, 2011, the Federal Reserve Board issued regulations on how Durbin was to be implemented. One key provision impacting the authorization and settlement of FSA card transactions is the requirement that card issuers must allow cards to route over at least two non-affiliated networks. This requirement would be satisfied, for example, if the card may be used over one signature-based network and one non-affiliated PIN-based network.

To allow members flexibility in meeting the new regulatory requirements, SIGIS modified the SIGIS IIAS Standard to support PIN based networks in addition to the signature debit networks that were previously supported.

Key Dates

  • The Dodd-Frank Wall Street Reform act is passed by Congress on July 21st, 2010
  • The Federal Reserve Board issues regulations on June 30th, 2011, FSA cards are given until April 1, 2013 to be in compliance with network routing provisions
  • SIGIS ratifies PIN standard April 4, 2012 and requires networks to seek certification
  • SIGIS announces Visa and MasterCard completion of SIGIS Network Certification on June 6, 2012
  • All other networks can begin certification process effective June 8, 2012
  • Routing and Exclusivity rules on Card Issuers for FSA / HRA cards (those using transaction auto-substantiation systems) effective April 1, 2013