The Hill: Fed hands banks a win with debit card rule

[flpoljunkie]

Fed hands banks a win with debit card rule
By Peter Schroeder
06/29/11

Banks might have lost the broader war over debit-card fees, but they scored a small victory Wednesday when the Federal Reserve proposed a fee less severe than originally intended.

The central bank’s decision brought to a close a long and contentious lobbying battle on Capitol Hill.

Under the newly approved rules, the Fed capped the amount banks can charge businesses for swiping debit cards at a base of 21 cents per transaction — a substantial boost from the seven- to 12-cent cap originally proposed by the Fed in December.

In addition, 0.05 percent of the transaction can be added to the fee, as well as another cent if the bank employed certain fraud-prevention practices. The Fed also pushed back the effective date of the limits, from the original July 21 start date to Oct. 1.

Retailers and merchants, which beat back legislative efforts to delay the limits, were dismayed by the final fee.

"We're extremely disappointed," said Mallory Duncan, senior vice president and general counsel for the National Retail Federation. "The board members are overwhelmingly bankers, so they decided to take several billion more from the public and give it to the banks."

Duncan added that retailers would be looking at ways to challenge the Fed's rule.

more...

http://thehill.com/blogs/on-the-money/banking-financial-institutions/169091-banks-score-final-victory-as-new-limit-on-debit-card-fees-unveiled

[qb]

1. Screw the banks. I get $ from no-fee ATMs & pay cash.

[dixiegrrrrl]

2. Good way to screw the banks, I agree. Use cash as much as possible.

Also screws up the purchasing tracking that ends up in so many databanks.

Why are we helping the banks rip us off? Those fees result in higher prices.