Bad News For Debit Card Users

Do you own and use a debit card? Did you support the "financial overhaul" bill? If you answered "yes" to both questions, then you did this to yourself, and you only have yourself to blame.
http://www.redstate.com/erick/2011/03/14/durbin-and-federal-reserve-plot-to-fix-prices-and-harm-consumers/

Senator Dick Durbin’s (D-IL) amendment to the Financial Overhaul Bill is set to go into effect in April that will allow Obama and the Federal Reserve to set the prices of debit card interchange fees.

That may sound like a boring topic, but consider this: because of Dick Durbin’s amendment, banks are about to restrict the number of and amount of daily debit card purchases you can make. That’s right. JP Morgan is considering capping your debit card purchases at $50.00 to $100.00 per purchase.

Basically, by limiting the transaction fees that banks can charge on debit card services, they are severely limiting the profit that banks can make on these transactions. In response, banks are considering limiting how much you can spend per transaction, not to mention limiting how often you can use your debit card.

Basic logic here, guys. In the private sector, if you eliminate profit from something, you won't keep that something for long. In other words, the banks are going to set limits that essentially force us to use CREDIT CARDS more often. And retailers couldn't be happier.

The Fed has been talking about capping the interchange fee at 12 cents per transaction, barely ¼ of the current average fee of 44 cents. That means that local banks and credit unions will have to find other ways to make up revenues that will be lost. The banks’ loss, however, is the big box retailers’ gain.

The CEOs, working in cahoots with Durbin and the then filibuster proof Democrat Senate, are thrilled with the extra profits they will make once the rule goes into effect. Home Depot Exec, Carol Tome has said, “Based on the Fed’s draft regulations, we think the benefit to The Home Depot could be $35 million a year,” an amount they are willing to fight for. The lobbying efforts of these merchants have killed any attempts to codify passing savings along to the consumers, guaranteeing that retailers will get all of the profits for themselves.

So, the Feds are going to be allowed to set up this price fixing scheme that benefits retailers at the expense of banks... and their customers. Want to see "free checking" disappear? Doesn't matter, it might anyway.

Don't you just LOVE new regulations out of our omniscient and politically-driven federal government?