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

[Lanyap]

Is everyone starting to get notified of their banks new debit card fee - $3, $4, $5 + a month? The retailers, or swipers, will be keeping that percentage over the new cap as profit and consumers will pay more in the end for using their debit cards. Thanks Mr. Durbin. Can I haz a job with that new fee, please.

 

[nonlnear]

I'm still pissed about the stupid CCRA. Damn thing killed all the good credit card rewards programs. I liked being subsidized by the deadbeats. I used to get 5% cash back at grocery stores, gas stations, and pharmacies. Now I've got to settle for 5% at gas stations and 2% on everything else. We'll see how this wonderful mandate pans out...

 

[Craig234]

I'm still pissed about the stupid CCRA. Damn thing killed all the good credit card rewards programs. I liked being subsidized by the deadbeats. I used to get 5% cash back at grocery stores, gas stations, and pharmacies. Now I've got to settle for 5% at gas stations and 2% on everything else. We'll see how this wonderful mandate pans out...

You welfare queen, living off others!

 

[trenchfoot]

Yeah, just what we need: deregulate deregulate deregulate so the banks can do anything they want any time they want.

It's good for business.....THEIR business.

Airlines are also making a killing with add-on fees. I wonder how long it will take for them to get too greedy to the point where they too will have to be regulated to their senses.

 

[her209]

Is everyone starting to get notified of their banks new debit card fee - $3, $4, $5 + a month? The retailers, or swipers, will be keeping that percentage over the new cap as profit and consumers will pay more in the end for using their debit cards. Thanks Mr. Durbin. Can I haz a job with that new fee, please.

I switched to a credit union last year and haven't looked back.

 

[Ausm]

That's Congress working for their bitch!

 

[nonlnear]

You welfare queen, living off others!

Hardly. There's a big difference between a voluntary subsidy and an involuntary one. Kudos for just taking a cheap shot and not pretending there was a real argument there.

 

[EagleKeeper]

Not all banks are implementing the fees. Just like on Credit cards; start shopping arouind

 

[Atreus21]

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.

They can't do anything, not a thing, without you voluntarily handing your money over.

 

[Atreus21]

Yeah, just what we need: deregulate deregulate deregulate so the banks can do anything they want any time they want.

It's good for business.....THEIR business.

Airlines are also making a killing with add-on fees. I wonder how long it will take for them to get too greedy to the point where they too will have to be regulated to their senses.

Deregulate so that banks can stop being helped by the government.

Again, the airlines don't make a cent without you voluntarily handing your money to them.

 

[Lanyap]

I switched to a credit union last year and haven't looked back.

I switched to a credit union in the 80's. Never looked back.

 

[Lanyap]

More banking fees coming your way. Just what we need in this terrible economy with so many people out of work.

Thanks, Dick.

BBVA Compass to charge for paper statements
Published: Saturday, September 03, 2011, 7:15 AM

BIRMINGHAM, Alabama -- Customers of Birmingham-based BBVA Compass Bank who receive paper statements will soon begin having to pay $3 per month for the service, according to a letter the bank sent to customers this week.

It is the latest move by banks to offset federal regulations that are cutting into their revenues. Two weeks ago, Birmingham-based Regions Bank said that beginning in October, it will start charging a $4 monthly fee for some debit card customers.

The fee at Compass, which customers can avoid by switching to online banking, will be effective Sept. 30.

Banks across the country have started implementing new fees in response to a new federal regulation that will reduce the amount banks are reimbursed for debit card use from an average of 44 cents to 25 cents per transaction, said Bill Hardekopf, CEO of Birmingham-based Lowcards.com, a consumer web site.

"Unfortunately banking customers will have to get used to more of these fees as banks seek to make up for lost revenue," Hardekopf said.

John Kottmeyer, an adjunct professor of economics at Samford University's Brock School of Business, said he was surprised that BBVA Compass is implementing the fee. Kottmeyer said that is the first such fee he has heard of.

"What we are starting to see spread very quickly is the creativity of banks in coming up with fees to replace the much anticipated lost revenue due to new regulations effective Oct. 1," Kottmeyer said. "While charging fees for transactions, card usage and other banking activities is at least somewhat understandable, charging a fee to simply receive a statement on your account doesn't feel the same and may not sit well especially with older customers not as technology oriented as the younger generation."

Thaddeus Herrick, BBVA Compass spokesman, said that like all banks, the impact of new regulations has reduced revenue at BBVA Compass "while our costs have remained the same, or even risen."

"And like our peers, we have had to re-evaluate our products, services and fees," he said. "As we respond to this new operating environment, we're working hard to communicate openly with our clients well in advance of any changes we make."

In the letter to customers from Jon Mulkin, director of BBVA Compass' Consumer Segment Group, the bank said the $3 paper statement fee will apply to those who receive paper statements by mail. Customers can switch to online banking on the BBVA Compass Web site, his letter said.

Kottmeyer said he thinks more banks will continue to test the waters on new and expanded fees, similar to what the airline industry has done in terms of charging for carry on baggage and other services.

"As more and more fees are implemented, the more it will behoove consumers to shop around for banking services and to concentrate their banking with a small number of institutions including community banks and credit unions," he said.

This article is a few months old but still relavent.

Debit Card Debacle
The fallout from Dick Durbin's Payday Lender Empowerment Act.

Another day, another mess to clean up from the 111th Congress. The latest debacle is the looming Federal Reserve rule to fix prices on debit cards, which threatens the flow of credit to low-income Americans and promises higher fees on bank services for nearly everyone else.

This is another glorious result of the 2,000-plus page Dodd-Frank financial reform, which ordered the Fed to fix prices on what banks may charge merchants each time they swipe a transaction. The provision is the special handiwork of Illinois Democrat Dick Durbin, who pushed it through the Senate as a sop to Wal-Mart, Home Depot and other giant retailers. He also got to whack the banks one more time.

Under current rules, every time a customer uses a debit card in a store, the issuing bank charges the merchant a small transaction fee, which represents a percentage of the sale. Under the new Fed rule, which will take effect in April unless Congress acts to stop it, that fee will be capped at 12 cents per transaction, reducing the charges by some $12 billion to $14 billion and in effect transferring the cost of debit cards from the merchants who pay the fees to the consumers who use them.

Merchants argue that if they don't have to pay as much per transaction, they will pass along the savings in lower prices. While that is doubtful, the loss of that revenue will force debit card issuers to raise fees elsewhere to compensate.

Congress's 2009 effort to regulate credit cards shows what will happen. Do you like free checking? Enjoy it while you can, because unless you're a high roller you will soon be paying for check-writing privileges. The price controls have also caused banks to deny credit to marginal borrowers—i.e., those with low incomes. Many have been forced out of the formal banking system and into the arms of payday lenders (if they're lucky) and loan sharks (if they're not). Mr. Durbin should have called his amendment the Payday Lender Empowerment Act.

Amended to Dodd-Frank at the last moment, the Durbin gambit avoided the scrutiny of hearings and passed the Senate 64-33. Seventeen Republicans went along for this ride, which proves that ignorance is bipartisan. (See the Mensa list of GOP ayes nearby.)

But some who favored it at the time have changed their tune. In a letter to Fed Chairman Ben Bernanke, 13 Senators have called the pro-consumer pitch for the legislation a hoax, asking the Fed to minimize the damage. The signers include Republicans David Vitter (Louisiana) and Mike Crapo (Idaho) who voted for the amendment in their re-election year and now should be required as penance to take a remedial course in financial education. Write on a chalk board 1,000 times: Price controls on credit lead to . . . less credit.

Maine's Olympia Snowe has expressed belated concern for the new rule's impact on smaller banks, which often don't have large loan operations or other financial services to offset their loss of fee income. Democrats Kay Hagan (North Carolina) and Michael Bennet (Colorado) are also born-again critics. While the Durbin amendment created a carve-out for institutions with assets of less than $10 billion, few small banks will be able to compete in a marketplace blanketed with the artificially lowered fees of larger institutions.

As they survey their wreckage, some Members are rallying behind a bill introduced this week by Senator Jon Tester (D., Mont.) that would delay the rule-making for two years. Mr. Tester at least had the good sense to oppose the bill last year. But if the law is a bad idea, it won't be a better idea in two years. This looks like one of those classic Beltway compromises that gives Senators political cover but doesn't solve the problem.

Even Democrat Barney Frank, the maestro of politicized credit, has said the Fed's proposed rule sets the fees too low and is better left to the market. "Unfortunately the evidence we've seen elsewhere is that consumers don't get any benefit from this," he added.

Now he tells us. Mr. Durbin pitched his bill as pro-consumer but it was really an attempt to rob banks and debit-card issuers in order to pay off his campaign check writers in the retail industry. As usual, the little guy is getting trampled.

http://online.wsj.com/article/SB10001424052748704803604576077971342894228.html

 

[lupi]

the customers deserve those fees if they don't switch banks.

 

[Gonad the Barbarian]

That's right. These fees are coming because the banks think customers will tolerate them, and nothing the government did changed that. You can try to blame government action all you want, but the fact is businesses find new and interesting ways to dick over their customers simply because it helps their bottom line.

 

[Golgatha]

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.

I'll just make the difference in price back by using a credit card and getting my 2%+ cash back on the transaction.

 

[her209]

This article is a few months old but still relavent.

Congress's 2009 effort to regulate credit cards shows what will happen. Do you like free checking? Enjoy it while you can, because unless you're a high roller you will soon be paying for check-writing privileges. The price controls have also caused banks to deny credit to marginal borrowers—i.e., those with low incomes. Many have been forced out of the formal banking system and into the arms of payday lenders (if they're lucky) and loan sharks (if they're not). Mr. Durbin should have called his amendment the Payday Lender Empowerment Act.

http://online.wsj.com/article/SB10001424052748704803604576077971342894228.html

That's quite the hyperbole there. How much does it cost to process the debit card transactions? I bet its certainly less than $0.12 per transaction especially given the ubiquity of debit and credit card usage these days. The gravy train for the banks is over and they're trying to keep it going by going to their customers to make up the difference. Customers going to vote with their feet.

The article also doesn't state the obvious that "poor" people have been paying for the cost of those "free" checking accounts that everyone else enjoys. That's because they're more likely to incur overdraft fees, NSF fees, etc. And since they're unlikely to have the minimum balance required to get "free" banking, they get dinged every month for a "maintenance" fee.

 

[Atreus21]

The article also doesn't state the obvious that "poor" people have been paying for the cost of those "free" checking accounts that everyone else enjoys. That's because they're more likely to incur overdraft fees, NSF fees, etc. And since they're unlikely to have the minimum balance required to get "free" banking, they get dinged every month for a "maintenance" fee.

I've noticed that too.

It seriously makes me think about buying a safe and storing my cash in there, because I'd spend less in fees and make about the same interest rate.

If the product sucks, don't buy it.

 

[blackangst1]

That's quite the hyperbole there. How much does it cost to process the debit card transactions? I bet its certainly less than $0.12 per transaction especially given the ubiquity of debit and credit card usage these days. The gravy train for the banks is over and they're trying to keep it going by going to their customers to make up the difference. Customers going to vote with their feet.

The article also doesn't state the obvious that "poor" people have been paying for the cost of those "free" checking accounts that everyone else enjoys. That's because they're more likely to incur overdraft fees, NSF fees, etc. And since they're unlikely to have the minimum balance required to get "free" banking, they get dinged every month for a "maintenance" fee.

First, people dont bounce transactions or go into overdraft because theyre poor. They do it because they dont or cant manage their money (or lack thereof). An NSF fee is a voluntary fee. Second, there are so many free checking products out there, again, monthly maint fees are voluntary.

 

[drebo]

You know what's really stupid? These banks are putting these fees on people who get paper statements, claiming it's really expensive for them to send them out...

Yet, I get no less than 3 junkmails from my bank PER WEEK. Want to save some money? Don't send me so fucking much junkmail. I'm ALREADY your customer, and when I want more services, I'll ask for them!

 

[Lanyap]

That's right. These fees are coming because the banks think customers will tolerate them, and nothing the government did changed that. You can try to blame government action all you want, but the fact is businesses find new and interesting ways to dick over their customers simply because it helps their bottom line.

Do you really believe that? Do you think the banks would be rolling out all of these fees if the governement had not lowered the interchange fee? Sure they try to add fees from time to time and that's normal, but they don't roll them out like this.

 

[Eos]

Seems like the laws enacted to protect consumers are like a girdle. Rein it here, it bulges out over there.

 

[Gonad the Barbarian]

Do you really believe that? Do you think the banks would be rolling out all of these fees if the governement had not lowered the interchange fee? Sure they try to add fees from time to time and that's normal, but they don't roll them out like this.

Banks will do anything they think is profitable. Do you really believe businesses would pass on potential avenues of profit out of the goodness of their heart? Or that they need the excuse of government intervention to pursue them?