NEW YORK ( TheStreet) -- Banks say the Durbin Amendment has cost them billions in revenues, and while figuring out where all the money is going isn't an easy task, one big winner looks to be giant buyout firm KKR & Co. (KKR - Get Report).
The Durbin amendment, named after Sen. Richard Durbin (D., Il.) and part of the 2010 Dodd Frank financial reform legislation, limits so-called interchange fees merchants pay to banks on debit card transactions. It took effect Oct. 1 and has reduced fees to 24 cents from a previous average of 43 cents, according to a May 1 report by the Federal Reserve.
Banks say the controversial amendment by Sen. Richard Durbin (D.-Il.) punished them only to help big retailers like Illinois-based Walgreen.
In its letter to the Fed, The Home Depot said interchange fees were the company's third-highest operating cost after occupancy and wages. The Home Depot CFO Carol Tome told investors during an earnings call in Feb. 2011 that an initial draft of the rule suggested the benefit to the company "could be $35 million a year." Under that proposal, interchange fees were capped at 12 cents per transaction. They were eventually capped at 24 cents, suggesting a benefit to The Home Depot of $17.5 million. A spokesman for The Home Depot declined to comment on the number, saying the savings was not material.