Debit Card Fees Prompt a Push Near Deadline

[groovedaddy]

WASHINGTON — It seemed a good idea last year, when the financial crisis had turned banks into Public Enemy No. 1 and lawmakers were looking for ways to reward consumers still bitter about billion-dollar bailouts and executive bonuses.

Without much warning or debate, the Senate passed an amendment directing the Federal Reserve to reduce the hidden “swipe fees” that banks collect from retailers each time a customer makes a purchase with a debit card.

Merchants, who had complained that the $20.5 billion in annual fees were biting into their profits, were elated. Banks were stunned. Their lobbyists tried to reverse the move, but when the overhaul of the nation’s financial regulation was passed by Congress last July, the debit card cut survived.

Now, as the Fed faces a deadline in April to write the rules for the lower fees, banks and debit card companies are engaged in an all-out assault on Capitol Hill, enlisting a growing cadre of lawmakers and lobbyists to push for changes, delay or outright repeal. Banks contend the proposed cut in fees — to 12 cents per transaction from an average of 44 cents — will leave many of them unable to afford to issue debit cards to customers or will force them to raise other consumer banking charges to cover the costs. They also claim retailers will reap unfair profits.

http://www.nytimes.com/2011/03/08/business/08debit.html?_r=1&nl=todaysheadlines&emc=tha2

[Horse with no Name]

1. They are nothing but strongarmed henchmen

"unable to afford to issue debit cards to customers or will force them to raise other consumer banking charges to cover the costs"


Hey Mr. Bankster....how about the bank just ABSORB the cost and take it out of your big fat cushy bonus?? How is that for an idea???

Just because you are USED to getting the revenue doesn't mean you are entitled to it.

[Raster]

2. The Banksters absorb the cost?

Oh no, no, no... only the little people absorb the cost.

[subterranean]

3. I'd like to know what the actual cost to the bank is

every time I use my debit card. That's the fee the banks should receive. No more, no less. Why do they feel entitled to a cut of retailers' profits just because customers use their cards instead of cash?

[Cassandra]

4. retailers will reap unfair profits?

Oh, the hypocrisy.

[louis-t]

5. "reap unfair profits" They're right, y'know.....

Only money skimmers deserve profits. :banghead:

[yesphan]

6. "They also claim retailers will reap unfair profits."

OMG, they might then be able to hire new employees, which would stimulate the economy,
which would lead to economic growth which would help increase revenues which would.......

This goes very much counter to what the banksters, etc., want for this country.

WTF is wrong with these people ?

[groovedaddy]

7. From the Jim Lehrer News Hour last night

This was a good one on this very subject. Of course, in being objective, they had an industry hack on to spin their interests. Some of the points made is that this is essentially a price fix situation as the same fees are charged by all the banks, hence, no competition.
Originally, debit cards were sold by banks as a way to lower their costs. They've since turned them into a huge cash cow.

http://www.pbs.org/newshour/bb/business/jan-june11/debitcards_03-08.html