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WASHINGTON — The Senate refused Wednesday to delay new rules that would sharply cut the fees that banks can charge retailers to process debit card transactions.
The debit card rules were a major part of the Dodd-Frank financial regulation law passed last year. The Senate vote was one of the strongest challenges so far to the new law.
...
The Wednesday vote, which followed a vigorous floor debate, was a victory for retailers, who have complained that banks and the companies that control the largest debit card networks, Visa and MasterCard, have consistently raised the fees on debit card transactions even as the market has grown rapidly and technology costs have declined.
Those fees topped $20 billion last year, according to industry reports.
The Federal Reserve, as guided by the new law, had proposed rules that would cut the average debit card processing fee to 7 to 12 cents per transaction, from 44 cents currently.
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Home Depot executives, for example, told financial analysts on a conference call this year that a cap on debit fees could save the company $35 million a year.
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The Sunlight Foundation said in an April report that 24 lobbying firms had been hired last year to influence action on the debit card rules. Eighteen of those firms were registered as representatives of the two major debit card networks, Visa and MasterCard. A large portion of those lobbyists have gone through the revolving door between government and industry: 68 of the 79 people who registered as lobbyists for Visa or MasterCard previously worked in government, according to the Center for Responsive Politics in Washington.
When debit first was started, the charge was 15 cents and the banks made money on that charge. The 44 cent charge's purpose was to inflate the bank's profit into obscene territory.
The unspoken benefit to the merchant and the banks is that debt has essentially no fraud, since a PIN is required.
When debit first was started, the charge was 15 cents and the banks made money on that charge. The 44 cent charge's purpose was to inflate the bank's profit into obscene territory.
The unspoken benefit to the merchant and the banks is that debt has essentially no fraud, since a PIN is required.
That "benefit" is easily defeated since the majority of debit cards bear the MasterCard/VISA logo and thus the transaction can be completed as a "charge" instead of a debit and not require a PIN.
I use my debit card daily at fast food resturants. I have NEVER been asked for my PIN.
When debit first was started, the charge was 15 cents and the banks made money on that charge. The 44 cent charge's purpose was to inflate the bank's profit into obscene territory.
The unspoken benefit to the merchant and the banks is that debt has essentially no fraud, since a PIN is required.
Definately a start, though a dime off of the $.44 seems like a token gesture.....
When debit first was started, the charge was 15 cents and the banks made money on that charge. The 44 cent charge's purpose was to inflate the bank's profit into obscene territory.
The unspoken benefit to the merchant and the banks is that debt has essentially no fraud, since a PIN is required.
Hahahaha!
Against the banks?
Obviously you too are clueless how a business works.
All costs are passed down to the consumer.
The banks didn't lose. The consumers lost once again in higher fees elsewhere.
That "benefit" is easily defeated since the majority of debit cards bear the MasterCard/VISA logo and thus the transaction can be completed as a "charge" instead of a debit and not require a PIN.
I use my debit card daily at fast food resturants. I have NEVER been asked for my PIN.
Its a very good point and something that I've observed as well.... Most fast food restaurants don't ask debit or credit, take the card and swipe away..... I assume its intended and wonder whether there's a deal behind closed doors to make these transactions come across as primarily a "Visa" or "Mastercard" transaction? Or maybe its truly a convenience thing where transactions under a certain amount don't require a PIN....
When debit first was started, the charge was 15 cents and the banks made money on that charge. The 44 cent charge's purpose was to inflate the bank's profit into obscene territory.
The unspoken benefit to the merchant and the banks is that debt has essentially no fraud, since a PIN is required.
I wonder who the bad guys were trying to block the pro consumer bill?
Roll Call
Nineteen Democrats joined 35 Republicans in voting for Tester’s proposal.
19 out of 53 in the Democratic Caucus voted the wrong way. 35 out of 47 GOPers voted the wrong way.
Definately a start, though a dime off of the $.44 seems like a token gesture.....
unless i'm reading it wrong, it's a lot more than a dime off.
Quote:
The Senate vote was over a Federal Reserve proposal that's set to take effect next month that would cap debit-card transaction fees at 12 cents, compared with the current average of 44 cents per swipe.
I wonder who the bad guys were trying to block the pro consumer bill?
Roll Call
Nineteen Democrats joined 35 Republicans in voting for Tester’s proposal.
Why are they "bad guys"? If you read the entire argument, small banks and credit unions are unable to shift the lost profits over to other services like the large banks. The point of the legislation is that banks should not be using these fees as revenue stream. They should only be charging what it actually costs them to provide the service. I can agree with that. This is the same as ticketmaster charging a "service charge" when they don't provide any additional service besides processing tickets.
Why are they "bad guys"? If you read the entire argument, small banks and credit unions are unable to shift the lost profits over to other services like the large banks.
Yes that's a drawback but all in all it was a pro consumer bill and the big banks opposed it ....and that tells you something.
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