The Durbin debit card dupe

Chicago Sun-Times ^ | December 10, 2011 | Frank Keating

[Graybeard58]

Sen. Richard Durbin’s crusade against U.S. banks has blinded him to an undeniable reality: His price-fixing schemes have hurt the very consumers whose interests he claims to protect.

Contrary to his statements in the media and on the Senate floor, consumers have not received a single benefit from his so-called “Durbin Amendment,” which cut in half the price retailers pay to process debit card transactions. Our nation’s big-box retailers, however, have fared quite well, receiving a $7 billion windfall in profits annually from Durbin’s actions. Meanwhile, banks have been hit with a 45 percent reduction in the revenue they depended on to provide low-cost accounts, fight fraud and maintain the U.S. payments system.

What about consumers? They now pay higher costs for basic banking services — and continue to search in vain for the savings retailers promised to pass along.

These consequences didn’t come without warning. Community groups and economists, including Federal Reserve Chairman Ben Bernanke, cautioned Durbin that his price caps on debit card fees would harm consumers, but he refused to listen. In his zeal to punish banks, he could not comprehend that his special-interest giveaway to big-box retailers could harm people — particularly low-income Americans. Unfortunately, and quite predictably, that’s exactly what has happened.

Bank customers are now paying for services they previously enjoyed free. Free checking is becoming harder to find and debit rewards programs have become a thing of the past. These are real consequences as banks of all sizes continue to adjust to government-imposed losses in revenue.

Of course, any rise in the cost of financial services will most negatively affect Americans least able to absorb the increase. The Federal Reserve Bank of Boston just released a paper studying the new regulations. To no one’s surprise, it predicts that lower-income individuals will be those most impacted. Over the past year, this concern was voiced time and time again as community organizations worried about the regulation’s potential impact on the most vulnerable populations. Once again, Sen. Durbin refused to listen.

Maybe Sen. Durbin will listen to the question we’ve heard most often: Will consumers ever see savings at the register from the Durbin Amendment? The prospects are bleak. It appears that, despite promises to the contrary, our nation’s big-box retailers have chosen to simply pocket the money.

Perhaps it’s time for Sen. Durbin, in his supposed campaign to protect consumers, to call for an investigation into whether giant retailers have lowered prices for their customers as a result. We’re sure Americans would be interested in the findings.

We won’t hold our breath. It seems Sen. Durbin’s vendetta has blinded him to what’s best for consumers. And that’s very unfortunate.

Frank Keating is president and CEO of the American Bankers Association and former governor of Oklahoma.

[Graybeard58]

Unintended consequences? Hardly, Durbin is a liberal and knew full well what would happen. I can't prove it but Durbin's pockets were surely lined over this deal.

I was a Herman Cain supporter but did not buy into his 999 plan. I watched other supporters of Cain argue on this forum that the 9% sales tax part of his plan would be off set by retailers lowering prices on goods because of the money they would save by paying only 9% corporate taxes and was shocked that those conservatives were living in a dream world.

Like any good business person, they would pocket the extra profit and pass it on to share holders. I wouldn't have it any other way.

Durbin, like all good little liberals knew what his law would do to consumers, he wasn't "looking out for them", there was a lot in it for Durbin or he wouldn't have gotten these rules on the books, that only benefited retailers and Durbin, screw the consumers.

[unixfox]

Chairman Ben Bernanke, cautioned Durbin that his price caps on debit card fees would harm consumers, but he refused to listen.

Taxes harm consumers more than a silly assed debit card fee.

Course they won't say anything like that. Nothing but a pathetic bunch of idiots running this country.

[I am Richard Brandon]

"Durbin is a liberal and knew full well what would happen."

But he meant well, that's what counts!

[Vigilanteman]

Our morning talk show host in this market would call this Quinn's Law: Liberalism always generates results exactly the opposite of its stated intent.

[Chode]

and America takes another one in the........