Dodd-Frank "Reform" Leads Banks to Hike Debit Card Fee

Rush Limbaugh.com ^ | September 30, 2011 | Rush Limbaugh

[Kaslin]

BEGIN TRANSCRIPT

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.

BREAK TRANSCRIPT

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.

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[federal__reserve]

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.

[federal__reserve]

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.

[mouske]

“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.”