Vote to Limit Debit Card Fees Is Surprising Loss for Banks

[Omaha Steve]

We have a friend with a mom & pop store. Her best customer has a card that gets a 13% fee from her on his debit card. The highest fee she has to pay. She says about 6% is an average.

http://www.nytimes.com/2010/05/15/business/15credit.html?partner=EXCITE&ei=5043

By BINYAMIN APPELBAUM
Published: May 14, 2010

WASHINGTON — Retailers have begged Congress for years, in vain, to limit the fees they must pay to banks when customers swipe credit or debit cards. Bills never reached a vote. Amendments were left on the table. The Senate did not even grant the courtesy of a committee hearing.

That long record of futility ended in a landslide Thursday night. Sixty-four senators, including 17 Republicans, agreed to impose price controls on debit transactions over the furious objections of the beleaguered banking industry.

The amendment to the Senate’s sweeping financial legislation could save billions of dollars for family restaurants and dry cleaners, Wal-Mart and Amazon.com, and every other business whose customers increasingly pay with debit cards. It does not address credit card fees directly.

Consumers also could save money, particularly at businesses like grocery stores that compete on price. But some experts warned that lower profit margins could lead banks to curtail bank card reward programs.

The Senate approved a series of amendments unfavorable to the banking industry over the last week, but this one was widely regarded as the most surprising. Meddling in dealings between businesses generally is anathema to Republicans and a relatively low priority for Democrats.

And this was not an easy vote. Lobbyists for the wounded but formidable banking industry made clear to some senators that this decision would affect future campaign donations, according to people who participated in those conversations.

FULL story at link.

[Rex]

1. So they threatened the senators...fucking mafia.

Thanks Reagan.

[Egnever]

2. But some experts warned that lower profit margins could lead banks to curtail bank card reward progr

:rofl: :rofl: :rofl:

[HillbillyBob]

3. You can just substitute 'campaign bribes'?

"Lobbyists for the wounded but formidable banking industry made clear to some senators that this decision would affect future campaign donations, according to people who participated in those conversations."

[drm604]

5. Fine by me.

I hope they do donate less.

The banks may be wounded by this either way. If they donate less, then great! the Senator's are less beholden to them.

If they don't donate less, then the Senators have successfully called their bluff and may be less likely to believe similar threats in the future.

[crikkett]

17. The threat is that they'll donate MORE to challengers. n/t

[EFerrari]

4. This is good news for small stores!

[HughMoran]

6. They threatened quid pro quo?

Motherfuckers should lose their ability to lobby the minute they say the word "donation"

:mad:

I think they should be thrown in jail for such a violation. Too bad the law doesn't exist yet.

[onehandle]

7. The SENATOR Al Franken Decade Is Going Strong! nt

[Donnachaidh]

8. F*ck the bank card reward programs -- useless carrot on a stick for SELFISH customers

Yeah, you get a toy or a trip while others have to pay higher fees because you want the toy.

GOOD. This should be a starting point. Roll back those credit card charges to single digit and force the banks to give reasons WHY they need to soak customers with their nickel and dime fees.

[customerserviceguy]

11. Selfish?

So, I should simply forego my Hilton Honors points, just to not be selfish? I'd be paying for them, anyway.

If there's a uniformity in credit and debit card discount rates as a result of this legislation, that's fine by me, having 13% taken off the top by a bank is crazy. But on the other hand, how much were stores losing by having to account for cash and checks, and by having checks bounce?

We're becoming a largely cashless society, I just hope this legislation is not a step in the opposite direction, although I can see the need to control fees.

[Donnachaidh]

14. yes selfish - who do you think ultimately pays for YOUR points?

Of course, it's a carrot on a stick for the "f*ck you, I've got mine" typical American. I hope they DO get cut out, and we do go back to something other than a device to allow banksters rip everyone off with made up fees.

[customerserviceguy]

16. Who pays for the points?

Everybody who buys the products and services of the merchant that accepts the cards. Including me, whether or not I decide to use that card, or some other form of payment.

Here's another one for you: I take those after-dinner starlight mints that come with the check at the restaurant, too.

Look, I don't have a problem with restructuring the fee schedule, and even seeing the rewards cut out for everybody, but as long as they're available, I'm going to accept them, since I'm paying for them anyway.

[OhioBlue]

9. hope it passes. this will help a lot of small retailers. n/t

[John N Morgan]

10. Spam email is the only reward I ever got from a debit card! I just want to pay the folks for what

I'm buying. I don't need them to decide what I should be rewarded with ... they have my money and I want to pay for something.

[laughingliberal]

12. K & R nt

[ellie]

13. Beleagured banking industry my ass!

Fuck them all.

[ddeclue]

15. The only thing they are more afraid of than bank lobbyists are all the peasants with pitchforks..

the banks did this to themselves and are less popular than vampires these days.