Posted on 06/29/2011 1:18:43 PM PDT by Pan_Yan
WASHINGTON – The Federal Reserve appeared likely to approve on Wednesday a staff recommendation to cut by 50 percent the fees that banks collect from retailers each time a customer makes a purchase with a debit card.
The likely cap on the fees, to an average of about 21 cents per transaction, marks a small victory for banks because it is significantly higher than the initially proposed cap of 12 cents laid out by the Federal Reserve in December. Banks currently charge merchants an average of 44 cents per debit-card transaction.
The final rule was subject to a vote by the Fed’s Board of Governors at a Wednesday afternoon meeting. The rule was detailed in a staff memorandum released by the Fed prior to the meeting. While it was not certain that rule would be approved, measures are usually brought to the board for a vote only with the concurrence of a majority of the board members.
The new fee comprises a transaction fee of 21 cents and an assessment of 5 basis points for fraud reduction costs. It would go into effect on Oct. 21.
The fee cap is a result of the Dodd-Frank financial regulation act, which was signed into law last July. The law required the Federal Reserve to determine whether the fees charged to process debit-card transactions were “reasonable and proportional to the cost incurred” by the bank that issued the cards.
The law allowed, but did not require, the Fed to make an allowance in its fee cap for the cost of preventing fraud, which banks say is a substantial expense. Under the new law, the revamped fees are scheduled to take effect on July 21, the first anniversary of the signing of the Dodd-Frank Act into law.
(Excerpt) Read more at nytimes.com ...
And I will have to start paying fees on my formerly free checking account as a result. Idiots.
I will start using cash, except for my mortgage. I will shop for an account with the mortgage holder and be done. Merchants complain about these fees, but they pass them on to the consumer, also there is a HUGE cost (for merchants) dealing with cash for stores, it is expensive to process checks and cash.
I will start using cash, except for my mortgage. I will shop for an account with the mortgage holder and be done. Merchants complain about these fees, but they pass them on to the consumer, also there is a HUGE cost (for merchants) dealing with cash for stores, it is expensive to process checks and cash.
The bottom line is that you will likely see the end to free debit cards and free checking accounts.
What could possibly go wrong?
So card usage fees will probably INCREASE overall.
Really, really stupid and foreseeable consequence of this change.
“The bottom line is that you will likely see the end to free debit cards and free checking accounts.”
Which may be their real goal. Don’t forget laws were passed last year which allow them to access your accounts anytime they want. They have the capability to have real time access to your account without telling you, without a warrant.
The fewer accounts you have the easier it is to monitor where you are spending your money.
I read this as NO profit allowed (except for the fed of course).
The damage the Rats are causing is immense and I am beginning to doubt that it is reversable.
If I were running a bank I would not be so quick to shift all of that onto the consumer. The resulting backlash (and calls for more regulation) may be just what Obama is counting on.
Nothing better for a class-warfare campaign than having millions of consumers all wee-wee’d up at the banks.
Not surprising. Check-21, which eliminated the float on the consumer side but guaranteed it on the banks side was passed long enough ago that it is time for the banks to screw the consumer again...
And this is why the average American is going to be robbed blind by the stock market, if they haven't been already, and why average Americans should avoid the stock market completely.
Profits, losses, and stock movements will increasingly be tied to Gov't/Treasury/FED rules, regulations, spending, lobbying, bailouts, interest rate policy, etc... that is completely out of view and out of comprehension for the average man. It has become an insiders game.
Got in on Visa last month.
Turned out nicely :)
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