Measure to delay cap on debit card swipe fees defeated in Senate

her209

No Lifer
Oct 11, 2000
56,336
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0
http://www.latimes.com/news/politics/la-pn-swipe-fee-bill-20110608,0,4994594.story

The Senate rejected legislation Wednesday that would have halted pending federal regulations to limit the debit card swipe fees that financial institutions charge retailers, in a narrow vote that rekindled populist fervor against Wall Street.

The 54-45 vote did not split along typical partisan lines. Instead it pit one populist Democrat, Sen. Richard Durbin of Illinois, against another, Sen. Jon Tester of Montana, as both claimed to be fighting to protect consumers and small banks from fees that totaled $16 billion in 2009.

The delay in implementation is just a delay tactic to give the big banks more time to send out their minioins to work on the Congressfolk to kill the cap permanently. Glad it didn't work. Now it will be interesting to see who sided with the banks and who sided with (small) businesses.

EDIT: Link to the bill S.575
 
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thraashman

Lifer
Apr 10, 2000
11,112
1,585
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Too bad no one ever sides with the consumer.

Well by siding with the businesses they now aren't losing as much money whenever a customer pays with credit or debit instead of cash. So the business we'd like to hope will pass that on to the consumer. More likely the business will just make more money, and maybe hire more people. Who knows.
 

Thump553

Lifer
Jun 2, 2000
12,824
2,613
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A relatively close vote in the Senate that wasn't along party lines? I don't think that's happened in two decades.
 

piasabird

Lifer
Feb 6, 2002
17,168
60
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There are plenty of stupid fees on Debit Cards. I put my Tax Return on a Wal-mart Green Dot Debit card and then I see a fee for $3.00 monthly maint fee. What a rip off. Not doing this again.
 

CPA

Elite Member
Nov 19, 2001
30,322
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There are plenty of stupid fees on Debit Cards. I put my Tax Return on a Wal-mart Green Dot Debit card and then I see a fee for $3.00 monthly maint fee. What a rip off. Not doing this again.

And that's how you eliminate fees. Oh, but please Government, save us from ourselves!!!
 
Jan 25, 2011
16,818
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And that's how you eliminate fees. Oh, but please Government, save us from ourselves!!!

Not just ourselves. There's a problem when I can put $100 in a savings account and have it wiped right out in a few months without making a single transaction.
 

manimal

Lifer
Mar 30, 2007
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What always amazes me is how even issues like this create huge controversy. One would think that the only people that would be against such regulation are the people making money hand over fist.

Then the slippery slope dunce arguments ensue turning even the most basic defenses into warfare on some sacrosanct ideal..
 

wuliheron

Diamond Member
Feb 8, 2011
3,536
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What always amazes me is how even issues like this create huge controversy. One would think that the only people that would be against such regulation are the people making money hand over fist.

Then the slippery slope dunce arguments ensue turning even the most basic defenses into warfare on some sacrosanct ideal..

There are a lot of sadists, masochists, and just plain loonies in this world.
 

MovingTarget

Diamond Member
Jun 22, 2003
9,002
115
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Good. This was a delay tactic, pure and simple. Small businesses have been raked over the coals by big banks ever since the popularity of using plastic went through the roof.
 

Doppel

Lifer
Feb 5, 2011
13,306
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The banks will screw people some other way after this, it hardly matters.
 

Vette73

Lifer
Jul 5, 2000
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A relatively close vote in the Senate that wasn't along party lines? I don't think that's happened in two decades.


Its happens a lot. Mostly Dems cross the isle to support a big business vote as they got bribes... I mean donations from that group/company.

Republicans keep their people inline even if it hurts that Congressmans state/district. Dems don't control their people anywhere near as well.
 

Darwin333

Lifer
Dec 11, 2006
19,946
2,329
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And that's how you eliminate fees. Oh, but please Government, save us from ourselves!!!

Umm, these aren't fees that you pay unless you actually own a business and take (not use) credit cards as a form of payment. Since just about any small business must take CCs they are beholden to the big CC companies. Some, if not all, even make you sign a contract preventing you from offering a cash discount (passing the savings from not paying the fee to the consumer).

My company takes credit cards although most people do pay with checks enough don't to warrant its necessity. Please oh please tell me how to eliminate those fees without losing business and without breaching my contract.

Currently I basically divide the costs onto every customer I have, everyone pays more regardless if they use cash, check, or credit card just the same as every other company does. Ironically, you are actually paying the fees regardless of your actual method of payment while telling people how to eliminate them.
 

Doppel

Lifer
Feb 5, 2011
13,306
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Umm, these aren't fees that you pay unless you actually own a business and take (not use) credit cards as a form of payment. Since just about any small business must take CCs they are beholden to the big CC companies. Some, if not all, even make you sign a contract preventing you from offering a cash discount (passing the savings from not paying the fee to the consumer).

My company takes credit cards although most people do pay with checks enough don't to warrant its necessity. Please oh please tell me how to eliminate those fees without losing business and without breaching my contract.

Currently I basically divide the costs onto every customer I have, everyone pays more regardless if they use cash, check, or credit card just the same as every other company does. Ironically, you are actually paying the fees regardless of your actual method of payment while telling people how to eliminate them.
And since you do not pay less as a cash-paying consumer, because the prices are the same regardless, as that cash paying customer you are actually paying more than you otherwise should, in some regard literally paying a portion of those bank fees that the credit card users are putting to the merchant.

Credit cards have basically become a virus that the host cannot any longer live without and they are impossible to detach away.
 

drebo

Diamond Member
Feb 24, 2006
7,034
1
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Credit cards are a fact of life, and a convinience for both businesses and consumers.

I don't see why a small 2% processing fee shouldn't be allowed for the clearing houses that process all of the credit card transactions. For the business, it opens you up to a larger clientelle, and to consumers, it allows you to purchase things basically on a lay-away program. 2% isn't too much for that.

My biggest gripe is places that charge extra to use a debit card.

While I don't think that the government should be regulating how much these banks can make via these credit card fees, I also don't agree with the credit oligopoly we have. If more pressure were put on the clearing houses to be competitive, they would be more competitive.
 

glenn1

Lifer
Sep 6, 2000
25,383
1,013
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These are fees the merchant pays. And for small merchants they are pretty steep.

The current average is 44 cents per transaction, the legislation would give the Federal Reserve the ability to set a cap on the intercharge fee; and the Fed is proposing that cap be at 12 cents per transaction regardless of amount. Smaller institutions ($10 billion in deposits and under) are also exempt from the rules.

While lowering intercharge fees sounds like a slam dunk in theory, I bet you'll find that the banks recoup that lost income stream in other ways, such as monthly/annual fees to own a debit card. Reward programs for debit cards are also likely going away. The costs associated with debit card fraud (card reissuance, claims filings, etc) may also be now passed onto to the consumer since the lower cap on intercharge fees may not allow the banks to cover the costs associated with debit card fraud, which may get passed be enough for the banks to cover out of this revenue stream. In the end, I doubt the consumer will be much better off than before, and might even be worse off; break-even is probably best case scenario.
 

KlokWyze

Diamond Member
Sep 7, 2006
4,451
9
81
www.dogsonacid.com
The current average is 44 cents per transaction, the legislation would give the Federal Reserve the ability to set a cap on the intercharge fee; and the Fed is proposing that cap be at 12 cents per transaction regardless of amount. Smaller institutions ($10 billion in deposits and under) are also exempt from the rules.

While lowering intercharge fees sounds like a slam dunk in theory, I bet you'll find that the banks recoup that lost income stream in other ways, such as monthly/annual fees to own a debit card. Reward programs for debit cards are also likely going away. The costs associated with debit card fraud (card reissuance, claims filings, etc) may also be now passed onto to the consumer since the lower cap on intercharge fees may not allow the banks to cover the costs associated with debit card fraud, which may get passed be enough for the banks to cover out of this revenue stream. In the end, I doubt the consumer will be much better off than before, and might even be worse off; break-even is probably best case scenario.

So this is a bad thing because bankers will just look for other ways to take money from people?

I have regular conversations with people fed up with banks. Things like:

"Why should I deposit $30K savings with them when I get virtually no interest back?"

"Why should I pay maintenance fees just for the ability to write checks?"

The answer purely that the banking industry doesn't give a fuck about anyone. Not even their customers. They show it all the time. Shit. If they fail, the taxpayer will just fill their pockets all over again.

All they do is lend money or hold it hostage. They don't create shit, but the ability allow more reputable businesses to create things with real value. This is absolutely an industry that should be locked into a strictly limited profit ala casinos, since they do the same shit with the nation's economy. Only they never have to pay their fucking dues.
 

Craig234

Lifer
May 1, 2006
38,548
350
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So this is a bad thing because bankers will just look for other ways to take money from people?

I have regular conversations with people fed up with banks. Things like:

"Why should I deposit $30K savings with them when I get virtually no interest back?"

"Why should I pay maintenance fees just for the ability to write checks?"

The answer purely that the banking industry doesn't give a fuck about anyone. Not even their customers. They show it all the time. Shit. If they fail, the taxpayer will just fill their pockets all over again.

All they do is lend money or hold it hostage. They don't create shit, but the ability allow more reputable businesses to create things with real value. This is absolutely an industry that should be locked into a strictly limited profit ala casinos, since they do the same shit with the nation's economy. Only they never have to pay their fucking dues.

Simply put, basic banking functions contribute to the economy. The economy can do more with the availability of capital basic banking provides.

Modern Wall Street is largely a parasitical group, who recently took, drained, 40% of all profits in the country, most of their activity creating nothing, but milking wealth.

Matt Taibbi's most famous phrase is calling Goldman Sachs a "great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money". It fits Goldman Sachs best, but also fits Wall Street generally quite a bit.
 

KlokWyze

Diamond Member
Sep 7, 2006
4,451
9
81
www.dogsonacid.com
Simply put, basic banking functions contribute to the economy. The economy can do more with the availability of capital basic banking provides.

Modern Wall Street is largely a parasitical group, who recently took, drained, 40% of all profits in the country, most of their activity creating nothing, but milking wealth.

Matt Taibbi's most famous phrase is calling Goldman Sachs a "great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money". It fits Goldman Sachs best, but also fits Wall Street generally quite a bit.

The "normal" banks still take money using frivolous excuses. I'm not saying they are wrong in some regards. I'm reasonable. It's really that their business model is based upon just making up charges or fees that don't really create anything.

"Oh you were late on a payment. $35 please! Thanks."

The bank didn't do anything. They're only doing that because they have your money anyway. I can't complain about overdrafts now because they were forced BY LAW, to change their ways. Now they just try to trick people into enabling "protection". :awe:

Wall Street, IE Goldman Sachs, are just.... no comment. Nothing needs to be said. It's obvious what these institutions do and are.

Slightly off topic:
Corporations have lobbyists... are their consumer protection lobbyists? Or anti-war lobbyists? etc. etc.
 

Craig234

Lifer
May 1, 2006
38,548
350
126
The "normal" banks still take money using frivolous excuses. I'm not saying they are wrong in some regards. I'm reasonable. It's really that their business model is based upon just making up charges or fees that don't really create anything.

"Oh you were late on a payment. $35 please! Thanks."

The bank didn't do anything. They're only doing that because they have your money anyway. I can't complain about overdrafts now because they were forced BY LAW, to change their ways. Now they just try to trick people into enabling "protection". :awe:

Wall Street, IE Goldman Sachs, are just.... no comment. Nothing needs to be said. It's obvious what these institutions do and are.

Slightly off topic:
Corporations have lobbyists... are their consumer protection lobbyists? Or anti-war lobbyists? etc. etc.

Right, I said 'basic banking functions', not everything banks do, to point out the difference between things that contribute to the economy - loaning money to businesses, and paying interest to depositors to 'share the wealth' from that business, raising money with stocks. The fees are an abuse, but a relatively minor part of the issues with our financial industry IMO. It's a lot easier for the 'free market' to work there where depositors have many choices of banks to use in a competitive market.

No, the public lacks lobbyists for its interests. The financial industry has lobbying, the war contractors have lobbying, the 'don't waste tax dollars' citizens don't.

That's the basic issue of corruption - the few who greatly profit from something have far more resources to invest in it than the many who benefit by not wasting money.

This is why I've considered we could really benefit from some sort of 'national PAC' that citizens give to to compete with the corrupt lobbying, but let's face it: impractical.

We're far more likely to be able to pass laws limiting lobbying, than to get the public to match it.

Government is SUPPOSED to represent the public against concentrated wealth - that's why everyone gets a vote.

But the concentrated interests have been really, really good at doing things like using right-wing social issues to get votes for their very anti-public agendas.

So a lot of Congressmen have a choice, support the corrupt interests and have money for their campaign, or lose to someone who will support those interests.