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Friday, September 30, 2011

Debit Card Fees: Last Year Democrats Screwed Us, We're Feeling It Today

By Susan Duclos

Contact information for the Dick Durbin below the post.

Big news hit yesterday, announcing that banks were going to start charging their costumers a monthly fee for using their debit cards.

The round of new charges stems from a rule, which takes effect on Saturday, that limits the fees that banks can levy on merchants every time a consumer uses a debit card to make a purchase.The rule, known as the Durbin amendment, after its sponsor Senator Richard J. Durbin, is a crucial part of the Dodd-Frank financial overhaul law.

The Atlantic explains how the Democratically controlled Congress screwed the public last year but we are only noticing now because the regulations they passed last year are going into effect this year.

The Logic Is Simple

Bank of America is actually being quite straightforward about its rationale for instituting this new fee: it blames the government. A provision from last summer's financial regulation bill promoted by Sen. Dick Durbin (D-IL) capped the fees that banks can charge retailers when customers pay with debit cards. The new rule goes into effect on Saturday. Andrew R. Johnson at the Wall Street Journal reports:

Bank of America has said it expects the caps, which the industry lobbied against for months, to erase $2 billion in revenue annually.

"The economics of offering a debit card have changed with recent regulations," a spokeswoman for Bank of America said Thursday.

The only thing surprising about this news is that anyone Congress was so blind to reality that they expected anything different. Did they really believe that banks would just shrug when their revenues declined by billions of dollars? Since they can't get as much money from customers indirectly through debit interchange fees paid by retailers any longer, they're going the direct route and charging customers for using debit.

Say thank you Senator Dick Durbin (D-IL).

Web contact page for Durbin.

Office locations and contact information for Senator Dick Durbin

711 Hart Senate Bldg.
Washington, DC 20510
9 am to 6 pm ET
(202) 224-2152 - phone
(202) 228-0400 - fax

230 S Dearborn St.
Suite 3892
Chicago, IL 60604
8:30 am to 5 pm
(312) 353-4952 - phone
(312) 353-0150 - fax

525 South 8th St.
Springfield, IL 62703
8:30 am to 5 pm
(217) 492-4062 - phone
(217) 492-4382 - fax

250 W. Cherry Street
Suite 115-D
Carbondale, IL 62901
8:30 am to 5 pm
(618) 351-1122 - phone
(618) 351-1124 - fax

1504 Third Avenue
Suite 227
Rock Island, IL 61201
8:30 am to 4:30 pm
(309) 786-5173 - phone
(309) 786-5404 - fax