Schumer to banks: stop 'hiding' debit card fees (UPCHUCK BARF ALERT!)

News Radio 88 ^ | 6/30/02

[areafiftyone]

(New York-AP) -- Senator Charles Schumer says banks should have to notify consumers of ``hidden'' debit card fees.

He says those fees can run as high as a dollar-fifty per purchase. He plans to introduce legislation that would require banks to tell consumers each time they're being charged, like A-T-M machines do.

A recent study by the New York Public Interest Research Group finds that 57 percent of banks surveyed charge a debit card fee at each transaction. The average fee is 89 cents.

Schumer, who sits on the Senate Banking Committee, says he'll introduce the bill in the next few weeks.

[PeterPrinciple]

reminds me of paperwork reduction act, really made a difference.

I reviewed some auto loans for sale recently. average interst rate was 18% and most were willing to pay an extra $10.00 to do an electronic transfer rather than write a check and stick it in the mail box.

These kinds of people are going to spend their money anyway and it might as well be with the debit cards as anywhere else.

[John Jorsett]

Chuck is a buffoon, but even a buffoon can have a good idea once in a while. I don't have a problem with his proposal.

[NapaCA]

How are they hidden? I see them on my monthly statements.

Nothing is free. If you want to use your ATM card to purchase your groceries you're going to have to pay for the network infrastructure that gets your request for funds from the grocery store to your bank, then gets the approval from your bank back to the grocery store. All in 4 seconds.

I work on that network. It ain't easy or cheap to provide.

[HennepinPrisoner]

Actually, I don't have to pay extra if I use my ATM card to make a POS purchase. But if my bank did charge me, I would simply change banks or start paying with checks/cash again.

This is silly, overreaching legislation.

[PolishProud]

Why is this a barf alert? Which banks charge a debit charge? Anyone know?

[AdA$tra]

It ain't easy or cheap to provide.

That is crap. I work on networks as well. They were invented to save money over handling paper. It costs a ton more to move cash, process checks, and do paper payrolls than it ever will cost to transfer a few bits of data over already paid for wires.

[JCG]

Nothing is free. If you want to use your ATM card to purchase your groceries you're going to have to pay for the network infrastructure that gets your request for funds from the grocery store to your bank, then gets the approval from your bank back to the grocery store. All in 4 seconds.

Funny. I do this all the time with my credit card and the transaction is entirely free to me.

[Still Thinking]

If you want to use your ATM card to purchase your groceries you're going to have to pay for the network infrastructure that gets your request for funds from the grocery store to your bank, then gets the approval from your bank back to the grocery store. All in 4 seconds.

OK. So I should expect to see a rebate on my statement because I DIDN'T write a check for the same transaction?? Point is, the banks, with absolutely no encouragement on my part, replaced a system which worked, and which had no per transaction cost, with one that had such a cost. Why should I have to pay the cost for the new system? They built this system with their own money so they could screw their human employees and save money, which they are doing. Now I should tip them besides?

[Torie]

Why would anyone in their right mind use an ATM card for a purchase, when you can use a credit card and get cash back or airline miles, and get a "free" float for up to a month? I have NEVER in my life used my ATM card.

[RicocheT]

Agree, the charges are evident to any user that reads the initial agreement and looks at their monthly statement.

Schummer is doing the usual liberal tactic of pandering to those dumbest in society, a class that is growing as the lazy know the DemocRATS will grow government to "protect" them. The protection comes at a price to business and taxpayers, but the dumb are not worried as it's other people's money to them.

[Bogey78O]

It amazes me people will demand 1.50$ from the bank but damn Bush for giving them 300$ back of their own money.

[RickGee]

I've been using a debit card for many years now. I've never heard of any fees being charged for its use to make a purchase. I just checked my banking statement to be sure I wasn't missing something. There are no such fees. The old way was to use checks. So now the store has less paper to handle and it is faster. Why would they start charging to discourage the use of debit cards? Makes no sense.

I do know that ATM machines may charge a fee if they are not part of my banking system. I've only paid that fee when I really, really needed the money.

[varon]

I work on that network. It ain't easy or cheap to provide.

Then you should also know that the cost is paid by the merchant who pays a "transaction fee" for debit cards and a percentage of the transaction for credit cards in a "processing fee" in addition to any other charges such as monthly statement fees, network access fees, terminal leases etc.

Most Debit/Check cards that carry the MasterCard or Visa logo can be used as a charge card during the purchasing process thus avoiding the fee to the consumer. However, merchants discourage that practice because when the card is used as a debit card, they pay only a small fixed fee ( 25c - 29c ) instead of a % of the transaction which starts usually around 1.49% and up, depending on ISO that signed them up and which processor they are affiliated with.

[bybybill]

Lets see, Sen Chucky is going to use his vast experience to write a law that might save me 89 cents every time I use my ATM card { mine is free now}. Why do I think that, in the end, Chucky`s bill will cost me more $$? CAUSE IT ALWAYS DOES. Can anybody remember the last law that interfered with how a business operated that didn`t raise consumer prices?

[JohnBovenmyer]

What really annoys me is not the ATM fees, but the sales tax the state, etc. charge on the fees. At least I'm choosing to get some service for the fees, but I don't see why the state should get anything for merely shifting my money around.

[NapaCA]

It ain't easy or cheap to provide.

That is crap. I work on networks as well. They were invented to save money over handling paper. It costs a ton more to move cash, process checks, and do paper payrolls than it ever will cost to transfer a few bits of data over already paid for wires.

Oh really? While it is true the manual method of moving money *may be* more expensive, Electronic Financial Networks *are not cheap.* The wires *are not* already paid for. Every card swipe machine costs money, the circuits that run from the point-of-sale to the network provider (Star, Plus, NYCE,...) cost money. The network provider has a large investment in Non-Stop Transactional Systems (Tandem) and in large balance and settlement systems (IBM 3090's), and the personel who maintain these systems. All transactions that come through the network provider must be routed to the FI, Cisco and Motorola Vanguard routers are not cheap, nor are the Frame Relay circuits that connect the Network Provider to the FI.

You don't know what you're talking about.

[Reaganwuzthebest]

This proposal might not be a bad idea, but why bother with banks anyway? Most credit unions offer services free, including ATM use. And mine pays interest on my checking account.

[NapaCA]

Then you should also know that the cost is paid by the merchant who pays a "transaction fee" for debit cards and a percentage of the transaction for credit cards in a "processing fee" in addition to any other charges such as monthly statement fees, network access fees, terminal leases etc.

I suppose I should, but I'm a Network Operations manager, not an accountant... I do know that I've seen POS fees on my monthly statements, so your maybe not all merchants agree to pay this fee?