Power to the people.
It seems that because so many people commented on the upcoming Federal Reserve Bank’s controversial proposal to reduce bank debit card “interchange fees”, the Fed will not be able to meet its April 21 deadline for issuing the new rules that would cap the debit card processing fees bank charge to retailers.
FED Chairman Bernanke reported today that over 11,000 people weighed in on the proposed rules. He wants to use those comments for determining the effects of the rule.
I’m amazed quite frankly. A bureaucrat that actually decided to listen to those of us who have some skin in the game.
I have been writing about this subject for the past month or so. I know that the proposed rules are supposed to benefit the consumer. The new rules require the banks lower their interchange fees to 12% of the transaction amount. Naturally one would assume that the reduction will be immediately passed to the final consumer. This is NOT the case. The merchants are under no such requirement, and in fact will enjoy a $ 12 billion dollar windfall. The banks, bless there little souls, will simply recoup their lost profits by doing several things such as increase bank deposit requirements, increase interest rates on credit cards, charge for DEBIT card usage which is something JP Morgan Chase is contemplating, or reduce the maximum allowed per transaction to $ 50 -$100 which is also something Chase is doing. Banks are also eliminating rewards points. Wells Fargo has already done that so you can expect the other boys to follow suit.
I will say it again and again. I wish the Federal Government would get its hands out of the process of trying to pick winners and losers in the economy. Let us decide what business we will patronize, where we will spend our money. Get out of our way and let us do our thing.
I'd love to hear your comments on this. Please feel free to do so here.
It seems that because so many people commented on the upcoming Federal Reserve Bank’s controversial proposal to reduce bank debit card “interchange fees”, the Fed will not be able to meet its April 21 deadline for issuing the new rules that would cap the debit card processing fees bank charge to retailers.
FED Chairman Bernanke reported today that over 11,000 people weighed in on the proposed rules. He wants to use those comments for determining the effects of the rule.
I’m amazed quite frankly. A bureaucrat that actually decided to listen to those of us who have some skin in the game.
I have been writing about this subject for the past month or so. I know that the proposed rules are supposed to benefit the consumer. The new rules require the banks lower their interchange fees to 12% of the transaction amount. Naturally one would assume that the reduction will be immediately passed to the final consumer. This is NOT the case. The merchants are under no such requirement, and in fact will enjoy a $ 12 billion dollar windfall. The banks, bless there little souls, will simply recoup their lost profits by doing several things such as increase bank deposit requirements, increase interest rates on credit cards, charge for DEBIT card usage which is something JP Morgan Chase is contemplating, or reduce the maximum allowed per transaction to $ 50 -$100 which is also something Chase is doing. Banks are also eliminating rewards points. Wells Fargo has already done that so you can expect the other boys to follow suit.
I will say it again and again. I wish the Federal Government would get its hands out of the process of trying to pick winners and losers in the economy. Let us decide what business we will patronize, where we will spend our money. Get out of our way and let us do our thing.
I'd love to hear your comments on this. Please feel free to do so here.
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