Former White House Press Secretary and current Fox News commentator Dana Perino warns consumers that there’s trouble brewing in Congress. This might make using a debit card a lot more costly. To be a lot more accurate, it will actually affect nearly all consumer purchases and debit card interchange fees can be the cause, claims Perino.
Instant money for banks by debit card fees
Courtesy of an unheralded amendment to the financial reform law as pushed by Illinois Senator Dick Durbin, the Federal Reserve would like to be able to take control of fast cash debit cardinterchange rates. As Dana Perino describes them, an interchange rate is “money that a retailer’s bank pays your bank when you use your credit or debit card at their store.” This money is a valuable resource to smaller financial institutions; without interchange rates, it would be difficult for these smaller banks to offer basic services to their customers.
If the Federal Reserve were to cut off the income stream, smaller banks would have no choice but to pass on the cost to customers. In numerous of these cases, this would drive them to larger, a lot more impersonal banks that won’t have as much competition and can charge more for credit services. All of the consumers who balk at this could have to rely on cash, checks or fast installment loans for bad credit for their transactions, which offer no insurance on the back end within the event of fraud.
Dick Durbin’s amendment advances financial reform
Consumers have the pictures painted for them by Dana Perino also. . The cost will be passed to consumers. Some of the retailers already do this. In addition, no-fee checking would more than likely disappear, along with various rewards programs as banks look to make up for income lost following the Durbin amendment.
Price controls don’t work
Historically, price controls like this haven’t worked. The blog Wizbang uses the example of the prices of gas in Hawaii. One more example is Australian legislation from 2003. At that time, retailers began to charge additional for consumers paying with plastic, and the trend has continued. What Perino and many other concerned consumers are wondering is how something like the Dick Durbin amendment can sneak in without much attention, and will these consumers have to depend upon fast cash short term loan with no credit check a lot more often.
Discover a lot more info on this topic
Fox News
foxnews.com/opinion/2010/06/04/dana-perino-dick-durbin-senate-amendment-federal-reserve/
Wizbang
wizbangblog.com/content/2006/05/08/why-price-controls-dont-work.php
