Banks now using threatening ads to get us to sign their 'dontmakeuspay' petition

[flpoljunkie]

(This one was on the Washington Post's Greg Sargent's The Plumline blog)

Am sure you have seen ads like this from dontmakeuspay.org on many web sites, liberal ones included. I guess banks think we're too stupid to understand their 'tricks' or 'trick and traps' as Elizabeth Warren might put it. Banks really do not like the idea of small businesses paying smaller user fees to banks for people using debit cards. It eats into their profits, so they are trying to blackmail us into signing their dontmakeuspay petition by threatening to take away free checking and rewards programs.

To Help Small Businesses by Ensuring that Debit Card Interchange Fees Are Reasonable

What the Durbin Amendment does:

· The Durbin amendment would direct the Fed to issue rules to ensure that debit interchange fees are reasonable and proportional to the processing costs incurred. Visa and MasterCard currently charge debit interchange fees of around 1-2% of the transaction amount. These fees are far higher than the actual cost of processing debit transactions, and they mean that small businesses and merchants always get shortchanged when they accept a debit card for a sale.

· The Durbin amendment also prevents card networks like Visa and MasterCard from penalizing sellers for offering discounts to customers. The amendment would allow sellers to offer discounts for customers to use competing card networks and for customers to pay by cash, check or debit card. The amendment would also allow sellers to choose to decline credit cards for small dollar purchases (because interchange fees often exceed profits on such sales).

Why the Durbin Amendment is needed:

· The Durbin amendment is a response to interchange price-fixing by Visa and MasterCard. Interchange fees are received by the card-issuing bank in a debit transaction. However, Visa and MasterCard, which control 80% of the debit market, set the debit interchange fee rates that apply to all banks within their networks. Every bank gets the same interchange fee rate, regardless of how efficiently a bank conducts debit transactions. Visa and MasterCard do not allow banks to compete with one another or negotiate with merchants over interchange rates, and there is no constraint on Visa and MasterCard’s ability to fix the rates at unreasonable levels. Visa and MasterCard constantly raise interchange rates because the more interchange the banks receive, the more the banks will issue cards. Visa and MasterCard receive a fee each time a card is swiped, so rising interchange rates enrich them too.

· Visa and MasterCard have reduced debit interchange rates in other countries while increasing them in the U.S. While Visa and MasterCard continue to raise U.S. interchange rates (which are already the world’s highest), GAO found that “regulators in other countries have worked with Visa and MasterCard to voluntarily reduce their interchange rates.” Just last month, Visa lowered many European debit rates by 60% while increasing many U.S. debit rates by 30%.

[flpoljunkie]

1. Here's another one on Washington Post Politics. 'Bureaucrats want to take away your debit card.'

I am so glad Elizabeth Warren is in charge at the CFPB. They are trying their damndest to thwart the new regulations going into effect in the financial reform bill passed last year.

[ProSense]

2. They're trying to play on the same

"average people (teabaggers supported by the KochNuts)" are outraged.

[flpoljunkie]

3. Yes. Elizabeth Warren certainly has her work cut out for her.

If anyone can protect us consumers from predatory banks, payday loan sharks and credit card companies, she's the one.

[flpoljunkie]

4. Another. On Ezra Klein's blog. 'Politicians want you to pay more to use your debit card.'

This must to be an all out effort today--with several new ads.

[Dawson Leery]

5. The teabaggers and Koch brothers are outraged about this, surely.

The banks should be allowed to do whatever their want without any oversight or recourse for the consumers.

[flpoljunkie]

6. As Palin might say, 'How's that deregulation workin' for ya, American people?'

Deregulation of the oil and gas industry is their aim and stripping the EPA of their power to regulate industry pollution. We all painfully aware how bank deregulation worked for us. We have yet to clean up the mess it caused the American people. The banks, of course, have been made whole and are again thriving.

[PA Democrat]

7. Dirty secret about those "free" checking accounts:

Banks offered "free" checking because they knew that the offer attracted a higher percentage of customers who were more likely to overdraw their accounts. THAT is where the REAL money was being made. I saw this first hand when my son made a stupid mistake and overdrew his "free" checking account by $11.00 with a debit card purchase. Through creative accounting, they tried to charge almost $200.00 in overdraft fees, despite the fact that he transferred money into the account the next day which SHOULD have covered the original overdraft plus the first and only overdraft fee that should have been charged.

Now regulations have cracked down on banks' shady OD fee practices so they are looking for a way to recoup lost income.