We're in trouble. One way or the other they are going to screw us royally. Banks say they simply want to be able to charge for the cost of doing a debit card transaction. Last year congress said they could not charge more than 12 cents for such a transaction. While that might be reasonable, and this is less than the 44 cent average some banks were charging, it is still an inflated charge. Working with computers I know how much it costs to read a card to process a transaction via computers. It sure is not 12 cents. So now the banks have devised a way to lobby for the charge to be higher by saying oh yea, they also have to charge for what it costs them to fight debit card fraud, so they should be able to charge us a lot more per transaction. If that does not work they'll come up with some other way to charge us.
Sure seems like banking is the business that cannot fail. One way or another they are going to get our money.
Debit Card Fees Prompt a Push Near Deadline
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.
A coalition of banks and card companies have plastered subway cars and Internet sites with ads warning, “Bureaucrats want to take away your debit card!”
“I am appalled that our members will shoulder tremendous financial burden and still be on the hook for fraud loss while large retailers receive a giant windfall at the hands of the government,” John P. Buckley Jr., the president of Gerber Federal Credit Union of Fremont, Mich., told a House of Representatives subcommittee last week.
This week, a trade group of convenience store owners will storm Capitol Hill with their side of the story.
“These fees are stunting business growth and hurting efforts to hire more workers and expand operations,” Douglas Kantor, a lobbyist for the Merchants Payments Coalition, a retailer trade group, said recently.
The lobbying has been intense over the last year with the card companies and banks hiring, among others, Sam Geduldig, a former adviser to Representative John A. Boehner, Republican of Ohio and the House speaker, and Regina Mahony, formerly a senior adviser to Representative Steny H. Hoyer, Democrat of Maryland, according to OpenSecrets.org, which tracks lobbyists.
......
The banks are already trying to make up for the lost revenue, with lenders like Bank of America, JPMorgan Chase and U.S. Bancorp charging fees for things that once were free, like paper statements or online banking. TCF Financial, a Minnesota regional bank that relies heavily on revenue from debit card fees, has sued the Federal Reserve board to block the enactment of the Durbin amendment.
Banks and credit card companies contend that the fee cap will create a windfall for giant retailers like Home Depot and Wal-Mart, which they say generate the bulk of debit card transactions, while doing little for small retailers.
Banking lobbyists eagerly point to a conference call in which a Home Depot executive told financial analysts the proposed rule would lower its debit fees by about $35 million a year.
Small-business owners, for their part, cite what they say is the devastating impact of rising debit card fees. Small banks and credit unions say they depend on debit fees to allow them to offer other services, like free checking. “Under the current proposal,” Frank Michael, president of Allied Credit Union of Stockton, Calif., told the subcommittee, “we are going to lose money on every transaction.”
entire article: http://www.nytimes.com/2011/03/08/business/08debit.html?_r=1&nl=todaysheadlines&emc=tha2
Sure seems like banking is the business that cannot fail. One way or another they are going to get our money.
Debit Card Fees Prompt a Push Near Deadline
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.
A coalition of banks and card companies have plastered subway cars and Internet sites with ads warning, “Bureaucrats want to take away your debit card!”
“I am appalled that our members will shoulder tremendous financial burden and still be on the hook for fraud loss while large retailers receive a giant windfall at the hands of the government,” John P. Buckley Jr., the president of Gerber Federal Credit Union of Fremont, Mich., told a House of Representatives subcommittee last week.
This week, a trade group of convenience store owners will storm Capitol Hill with their side of the story.
“These fees are stunting business growth and hurting efforts to hire more workers and expand operations,” Douglas Kantor, a lobbyist for the Merchants Payments Coalition, a retailer trade group, said recently.
The lobbying has been intense over the last year with the card companies and banks hiring, among others, Sam Geduldig, a former adviser to Representative John A. Boehner, Republican of Ohio and the House speaker, and Regina Mahony, formerly a senior adviser to Representative Steny H. Hoyer, Democrat of Maryland, according to OpenSecrets.org, which tracks lobbyists.
......
The banks are already trying to make up for the lost revenue, with lenders like Bank of America, JPMorgan Chase and U.S. Bancorp charging fees for things that once were free, like paper statements or online banking. TCF Financial, a Minnesota regional bank that relies heavily on revenue from debit card fees, has sued the Federal Reserve board to block the enactment of the Durbin amendment.
Banks and credit card companies contend that the fee cap will create a windfall for giant retailers like Home Depot and Wal-Mart, which they say generate the bulk of debit card transactions, while doing little for small retailers.
Banking lobbyists eagerly point to a conference call in which a Home Depot executive told financial analysts the proposed rule would lower its debit fees by about $35 million a year.
Small-business owners, for their part, cite what they say is the devastating impact of rising debit card fees. Small banks and credit unions say they depend on debit fees to allow them to offer other services, like free checking. “Under the current proposal,” Frank Michael, president of Allied Credit Union of Stockton, Calif., told the subcommittee, “we are going to lose money on every transaction.”
entire article: http://www.nytimes.com/2011/03/08/business/08debit.html?_r=1&nl=todaysheadlines&emc=tha2