Posted on 06/08/2010 4:12:02 PM PDT by Marty62
Stop the Durbin Interchange Amendment!
Important Information about the Durbin Interchange Amendment
1. What is the Durbin Interchange Amendment?
The Durbin Interchange Amendment is an addition to a large bill passed by the Senate called the Restoring American Financial Stability Act of 2010 (S. 3217). The amendment was added at the last minute with little debate or discussion and was not included in the Wall Street Reform and Consumer Protection ACT (H.R. 4173) passed previously by the House of Representatives.
Senate and House of Representatives are meeting in conference to decide what will be included in the final bill. This includes consideration of the Durbin Interchange Amendment. Their plan is to pass the bill into law by the end of this month. So time is critical!
2. What is interchange?
Interchange is the small fee merchants pay when someone uses their debit or check card. This fee is negotiated between the merchants, Visa/MasterCard and financial institutions. The fee is set low enough for merchants to reduce their costs (compared to checks and cash), check customers out quickly, and get a guaranteed payment from the financial institution who issued the card. The fee is also high enough for financial institutions to offer their cards, and like ........, provide them for free.
Merchants and financial institutions both volunteer to accept Visa/MasterCard programs. No law or regulation forces either party to participate.
3. What will the Durbin Interchange Amendment do, and how will it affect me?
The interchange amendment will severely reduce the interchange fee merchants currently pay to card issuers like ........ The government will be directly involved in setting interchange, even though it is already a negotiated rate in the free market.
As a credit union member – or customer of any bank – you may find that many products and services will no longer be provided free of charge. For example, .......may have to charge a fee to cover the costs of offering check cards. Furthermore, the interchange amendment may affect the number of merchants who accept check cards and impose limits on how little and how much you may spend when using it.
4. If passed, what is the impact on ..............?
Because we are a credit union and not a bank, we are member-owned and not-for-profit. That means that our income is returned to our members in the form of higher dividends on savings accounts, lower rates on our lending products, and a variety of free products and services. Loss of income from check card interchange would impact our ability to offer free checking, free web bill pay, free ATMs, free online and mobile banking, and of course, free check cards.
Because we proudly serve all in the Department of Defense, we want to be able to continue to provide the best possible – and free – products and services to our members.
5. Who benefits if this amendment is passed?
Merchants will benefit, and big box retailers will be the biggest winners. By cutting the costs of interchange fees on check cards, they will increase their profits. Someone will have to absorb those costs, and that someone will be you.
6. What happens next?
The Senate’s law will be matched against a similar law passed by the House of Representatives by a Conference Committee. Discussion about the Durbin Interchange Amendment has already started. Calls to your Representative and Senators will have an influence on the decisions these politicians make on your behalf. That is why it is important to call them now!
We will be providing any needed updates to this information as it becomes available.
THANK YOU AGAIN FOR MAKING YOUR OPPOSITION TO THE DURBIN INTERCHANGE AMENDMENT HEARD.
Hmm...so why shouldn’t a customer pay for the right to use a service? Something seems not quite right, here.
Sticking it to the banks will not get sympathy from many, but the results are that those costs will be passed on to the consumer, and that’s the kicker. Once again, the DemocRATS are sticking it to the people any way they can.
The Dems plan to bring this country to our knees. November can’t get here fast enough....
CREDIT UNIONS ARE NON-PROFIT,every penny counts
Yep , that is what this is about. If Durbin gets this through. ALL insitutions, even non-profits will be paying increased fees.
If you own a small biz this is awesome news. Trust me there is no “negotiation” on the fees. Visa dictates it—period.
The Credit unions are acting a like a front group for VISA.
Next time you are in your local gas station, or mom and pop store—ask them about these fees.
By the way, Visa is a monopoly for all practical purposes.
“CREDIT UNIONS ARE NON-PROFIT,every penny counts”
I read that, Marty, thank you.
But I don’t understand why a customer SHOULD NOT pay for using a service. Not everyone wants to use an ATM; why should it be free. Same with debit cards. Charge those folks who use ATMs and debit cards for the service. And bring back check fees - NO free checking.
That is the way it used to be - one paid for the service because truly, nothing is free. In one way or another, it will always cost something, somewhere, in the end.
It’s amazing Dirty Turbin Durbin is still around and kicking.
It’s time to make these people accountable. Maybe a little jail time.
The customer already pays through the price structure in transactions determined by the free market. Government regulation and freezing of terms will raise the actual cost of the transactions and is not prices set by the market. Government involvement puts bureaucrats in the loop which alone raises costs and introduces corruption because companies will have to turn to the bureaucrats in order to alter prices to their advantage. No longer is the deciding factor competition and the market, it is rather the placation of the bureaucrats. That requires more employees-lobbyists and bribery experts- and money for the necessary bribery.
Then address the monopoly status and leave the market otherwise alone, Do you really think adding a layer of bureaucrats will improve the situation or lower costs> It must raise costs though it will cause some cost shifting.
And customers have a right not to patronise a store that won’t accept their debit cards.
That is 100% true.
Every time you take an ATM card to an ATM not owned by the issuing financial institution, you already pay a fee.
Every time you swipe a debit card at the grocery store or at the pump, the cost of the transaction (e.g., the interchange fees) is bundled into the price you pay.
And bring back check fees - NO free checking.
Banks accept deposits at low interest rates and then loan them out at higher interest rates. The difference between the interest rate paid on deposits and the interest rate earned on loan receivables is called the spread, and that's what financial institutions primarily use as income.
So no, that "free" checking usually isn't "free," since the depositor could probably get a better return on the open market.
Nobody is forcing those local "mom and pop stores" to accept credit and debit cards.
By the way, Visa is a monopoly for all practical purposes.
Then address the anti-trust violations in question, as arthurus has suggested at post 11, instead of cheering on the stupid Democrats as they push price controls which will ultimately trash the consumer banking system, just like Obama's CARD Act did.
I agree, the lies and underhanded deals make me sick. Maybe it is actually a way of making CUs go the way of the neighborhood bank.
Is this just another way to secure the giant banks. If CUs go out of business people will be forced into megabanks?
I love CUs. Even one like mine that has to care for Customers World wide, it still seems like a neighbor.
Yeah stick his special interest Laws into mega Legislation.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.