Skip to comments.Dodd-Frank "Reform" Leads Banks to Hike Debit Card Fee
Posted on 09/30/2011 1:54:00 PM PDT by Kaslin
RUSH: You remember, ladies and gentlemen, I can't tell you the number of times it has become a major discussion topic for callers when banks have raised the ATM fee. People go nuts. They e-mailed me and called and talked about what a bunch of rotten creeps the banks were, "Why does there have to be a fee on the ATM anyway? I'm already paying this bank out the wazoo." Well, sit tight because your bank is going to jack up your debit card fee. "Bank of America customers with basic checking accounts will be hit with a $5 monthly fee in order to use a debit card for purchases, the bank announced Thursday. Banks and card companies have been aggressively establishing and raising fees in recent weeks as banks plan for new rules taking effect Saturday that limit the amount they can charge retailers for each debit card purchase." And credit card purchases.
For example, the fee is being cut in half. This is Dodd-Frank, and this is the Financial Regulatory Reform Act, the bill, this is where all the so-called consumer protections are. This is classic. This is exactly what the Democrats do. This is another one of those instances where the Commerce Committee in the Senate takes on cable TV rates, "They're way too high, we're going to have legislation, we'll make sure the cable rates go down," and all they do is go up. So in a consumer protection bill, Dodd-Frank, there is a directive that the fee banks charge institutions for using their credit cards be cut in half. I think it's 48 cents down to 24 cents per transaction. So the banks, "Well, okay, we've got to obey that law." So what they're doing is they're making it up somewhere else.
The Democrats never factor the dynamism into anything they do. They look at everything as static. They say, "We're going to punish these banks. These banks have been ripping off our voters. They've been ripping off our customers. We're gonna cut that transaction fee in half." And after all these years they have to know that the banks are going to find a backdoor way of getting that money back and then some. So while the transaction fee has been cut in half by law here comes a $5 charge, brand new $5 fee, monthly fee to use the debit card. This is above and beyond whatever your ATM fee is. This is now a $5 monthly fee just to have and use a debit card. Brand new fee. Because you see, there's nothing in Dodd-Frank prohibiting it. Nothing whatsoever. They just failed to calculate the dynamism. They think that all of these institutions they target for punishment are going to sit there and take it. It never happens.
Every time the Democrats set out as a party to help the little guy it's the little guy that ends up getting shafted. So you're at Bank of America, you're about to see a $5 monthly charge, if you can even find it on the bill, but it's going to be there all because Chris Dodd and Barney Frank decided to have a consumer protections bill, and Obama was out there touting it, too. "JPMorgan Chase and Wells Fargo are testing $3 fees for debit cards in select areas." What do you mean testing? What, they're going to find out it doesn't work? "Citibank recently announced it is raising its fees for checking accounts. Janney Montgomery Scott analyst Thomas McCrohan said last week that Visa and MasterCard, the top two debit card companies, may increase drastically increase fees on small purchases to offset the losses."
So you might end up going back to using checks by the time these banks get through finding ways around this new law that goes into effect, once again, thanks to the Democrats. All this is owed to Frank and Dodd and Obama, so-called consumer protections. Your debit card fees are going up. Your ATM fees. Not checking account. That's untouched. You might end up going back to writing as many checks as you used to write. And don't be surprised if they start at some point adding fees for electronic payment of bills. "'The economics of offering a debit card have changed with recent regulations, and we've decided to introduce a monthly fee for customers who use their debit cards for purchases,' Anne Pace, a spokeswoman for Bank of America, told Bloomberg News.
"Pace said the new debit card fee will be rolled out in stages starting with select states in January. ... Clients with premium accounts will not be affected, and customers who use their debit card solely to receive cash at ATMs will not be charged," because they're going to get it on the other end with the ATM fee which will probably be raised as well. So this could add up to an additional $60 a year, $60 in new fees as the banks recoup what Dodd and Frank told them they have to do without.
RUSH: You know the piece de resistance for all this financial news is that it's actually the so-called Durbin Amendment which was a last-minute addition to the Dodd-Frank bill that's really causing all this. The Dodd-Frank bill was bad enough as a stand-alone. It was a disaster, and then Durbin added an amendment, a last-minute addition to the Dodd-Frank bill. They're calling it the Durbin Amendment and that's where the details reside, which is causing the banks to make all these changes. Durbin wanted these extra fees to help provide fraud detection. I kid you not. That was his purpose for putting in these extra fees. They were his idea and the money raised was supposed to go to fraud protection. What we need is fraud protection from Congress. We need fraud protection from the likes of Durbin and Dodd and Frank. I would pay $5 a month for that.
And - the call for more regulation that will be a result is exactly what these idiots (Dodd, Frank, Durbin, Obama, Etc) are hoping for.
Dodd-Frank “Reform” Leads Banks to Hike Debit Card Fee
Specifically, the Durbin Ammendment:
RUSH: You know the piece de resistance for all this financial news is that it’s actually the so-called Durbin Amendment which was a last-minute addition to the Dodd-Frank bill that’s really causing all this.
The Dodd-Frank bill was bad enough as a stand-alone. It was a disaster, and then Durbin added an amendment, a last-minute addition to the Dodd-Frank bill. They’re calling it the Durbin Amendment and that’s where the details reside, which is causing the banks to make all these changes.
Durbin wanted these extra fees to help provide fraud detection. I kid you not. That was his purpose for putting in these extra fees. They were his idea and the money raised was supposed to go to fraud protection. What we need is fraud protection from Congress. We need fraud protection from the likes of Durbin and Dodd and Frank. I would pay $5 a month for that.
Sometimes I have to wonder, as a free-market Conservative guy, why I should continue to stick my neck out to defend businesses that are this stupid.
For a lousy five bucks B of A is going to hand the populists out there a very potent political weapon. Like it or not, there is a lot of seething hatred out there for banks, bubbling just below the surface. It is just waiting for a sufficiently skilled charlatan to come along and free it.
Just like businesses that are stupid enough to post help wanted ads saying “unemployed need not apply” and then bitch about it when Obama tries to make political hay out of that.
WTF guys? If yinz are THIS dumb all of us will never be able to save you from the Marxist hoardes.
Time to stand up to banks who enforce this and put your money in piggy bank.
Just pay everything by cash. No fees, no problem. A little inconvenient, but you will pay if you want convenience.
And it is so unfair, even when they are responsible for the general economic conditions and even when they have received enormous sums in bailouts funded either direct taxes, or the fed printing money, which is inflation, which is a general tax on everyone.
It is just so, so, so, so, so unfair.
Okay, but where do you propose they get the money to make up for the lost revenue due to the fee cuts? It has to come from somewhere, and Congress just said “not over here”, so it’s got to come from somewhere else.
I think the sentiment is that banks shouldn't be in business to make a profit - they should be out there providing a public service.
Who will cash your check to provide the cash to spend? Banks will charge to cash your check unless you have an account.
Unintended consequences? Probably not. On the bright side; the post office will get more business when we have to start mailing our checks again.
IMHO, Congress wants us to change our method of paying for stuff. Why else would they pass regulations like this?
Fine. Ill change. Ill go to the ATM, withdraw a bunch of cash, go to the store and spend it. Everybody wins except the bank. The store wins because they wont have to pay the debit card transaction fee. I win because I wont have to pay the debit card monthly fee.
The bank will lose twice: First because my checking account balance wont be as high (Ill be carrying it in my pocket) and second because there wont be a transaction fee from the store.
And if the bank decides to charge a flat monthly fee on my debit card? Ill go to all cash and switch the debit card for an ATM-only card. And if the bank decides to charge a flat monthly fee on the ATM card? Ill go back to writing checks. And if the bank decides to start charging for my checking account? Theres always the credit union. They appear to really want my business.
The bank will NOT win. I wont let them.
The Left and many on the Right agree than banks are evil. Include me out!
Just open a basic checking account and use it to pay utility bills and such.
Banks are a free enterprise. They are market based. No body
is forcing you to patronize them. I hope you are not for
government control or takeover of banks.
“Okay, but where do you propose they get the money to make up for the lost revenue due to the fee cuts?”
Be still my bleeding heart. Where or where will they find the money to replace those usurious rates they can’t charge small business anymore? /s
I know!!!!! get everyone with a bank account to send them $60 a year...... lets see 125M X $60 = ?????? Holy bat guanno, now we’re talking some real dough batman. Money for free!
Every time the Democrats set out as a party to help the little guy it’s the little guy that ends up getting shafted.
The money has to come from somewhere. The Dems think they can just instruct them to charge less in one area, and not make it up somewhere else. Anyone who made it to the first day of econ 101 knows better.
“Just open a basic checking account and use it to pay utility bills and such.”
I have never had a debit card in spite of the bank’s constant pressure to acquire one. I have always had a free checking account. A couple months ago the bank did away with their free checking accounts and converted our account to a $15.00/month account. We changed to a $6.00/month account and will probably transfer to a credit union.
Not in favor of government control of banks, although ultimately they already do control them. I don’t know how you made the leap from my commenting about having to pay to cash checks if you have no account to suggesting that I support government takeovers of banks.
I did not accuse you of wanting government control, I asked you if you would be for it, and I am sure you are not.
The main point is, any bank is a free enterprise, free to charge whatever they think is in the best interest of the business. There is no mandate which requires us to open a checking account. If you are unhappy with one bank, shop for
the next one or find an alternate method to save you money.
And by the way I am against Dodd-Frank law because it is over-regulation. What is really needed is to bring back Glass-Steagall. Repeal of that law is the main reason for the banking debacle of 2008, and I can see more such debacles ahead.
“The main point is, any bank is a free enterprise, free to charge whatever they think is in the best interest of the business. There is no mandate which requires us to open a checking account. If you are unhappy with one bank, shop for
the next one or find an alternate method to save you money.”
I agree with your above comments. As a practical matter, we still need checking accounts (my old fashioned opinion). My problem lies in finding “an alternate method.”