Banks Win Again: Fed Caves On Debit Card Fees

The legacy of Ken Lewis always wins in America.

Maybe the other backdoor bailouts and subsidies aren't enough, but in any case the banks' army of lobbyists has the Fed reconsidering the limits it planned to impose on debit card fees paid by merchants.  Remember, the Dodd-Frank Financical Reform bill had authorized the Fed to set such limits and prohibit the banks and credit card companies from gouging retailers and consumers with hidden or exorbitant fees.  Notice that Dodd-Frank didn't set any limits in the bill itself, but thanks to the lobbying efforts by the financial industry, Congress passed that responsibility on to the most bank-friendly "regulator" in the history of the United States.  That's right, the Fed.  This was by design.  The banks knew they could fight the battle on fees later on, out of the spotlight.

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Fed may reconsider plan to limit debit card fees

Source - Associated Press

WASHINGTON – The Federal Reserve is telling Congress it may reconsider its proposal to limit the fee that banks charge merchants for debit card transactions to 12 cents per swipe.

The financial overhaul bill that President Barack Obama and Congress enacted last summer ordered the Fed to issue rules that would set the fees at a reasonable rate. Currently, merchants typically pay between 1 and 2 per cent of the transaction's total.

The question of where to set the fees has triggered an intense lobbying battle pitting merchants and some consumer groups against banks and credit card networks.

In testimony prepared for delivery to the House Financial Services Committee on Thursday, Fed Governor Sarah Bloom Raskin says because the issue is so complex, the Fed is "reserving judgment" until it gathers more information.

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Read More Here...

• Fed Debit Card Cap Roils MasterCard, Visa (From December -- Barrons)

• Bernanke: Small Banks Could Get Hurt By Debit Fee Plan (WSJ)

• Dodd-Frank Wall Street Reform Bill Amended To Eliminate $19 Billion Bank Tax (You Will Cover Cost Instead)

• Chris Whalen: New Bank Bailouts Under Dodd-Frank For Bank Of America, Wells Fargo Within 12 Months (VIDEO)

Comments

[The Beeber]

Where is Liz Warren?

[DailyBail]

it's authority given to the fed...the cfpb and warren don't control it...

[The Beeber]

She is or was an advocate, has she been silenced by the strong-arm tactics so often used by the left. This article is about credit card fees and banks, she was leading the fight and had a voice. She had a voice so powerful that Obama and Geithner couldn’t handle the criticism. The authority is given to the government, the government gave it to the fed and it can take it back. I am not convinced.

[S. Gompers]

Looks like those three have their mouths full in the picture.

[Cheyenne]

Outstanding commentary, DB. Thanks.

[DailyBail]

cheyenne...this commentary was from pitchfork....on this one all i did was choose the photos and write the following tag line...

The legacy of Ken Lewis always wins in America.

[Maggie]

Get rid of your debit cards! That's right! If you need to do business with the bank, GO INTO THE BANK and get your cash then do business with the cash elsewhere. Drop the cards, drop the fees, drop it all right back in their laps. Most banks don't have enough tellers to take care of customers anyway. Maybe this is one way we can spur the economy and put some people back to work. I for one am tired of the long lines.

[Canuck]

Debit cards LOL! Oh these banks fvk themselves over time and again. I get a call from bank: "the tell Mr Canuck he needs to key his new debit card as his current will be canceled in the next two weeks". (they're forcing everyone on to the RFID chipped card) I call them back, said don't cancel his debit card, he works in camp, sometimes up to two months at a time and if you cancel it he'll have no way to get home. So he does get home, they cancel his old card, he takes mine in to pay the c.c. bill, they said he couldn't use mine, actually phoned me to give me shit for giving him my card. So the bank is phoning me constantly demanding payment, I just laugh and tell them he's stuck in Faro, Yukon because they cancelled his card :rofl: Idiots.