Skip to comments.The Durbin debit card dupe
Posted on 12/10/2011 12:40:36 PM PST by Graybeard58
Sen. Richard Durbins 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 nations big-box retailers, however, have fared quite well, receiving a $7 billion windfall in profits annually from Durbins 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 didnt 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, thats 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 ones 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 regulations potential impact on the most vulnerable populations. Once again, Sen. Durbin refused to listen.
Maybe Sen. Durbin will listen to the question weve 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 nations big-box retailers have chosen to simply pocket the money.
Perhaps its 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. Were sure Americans would be interested in the findings.
We wont hold our breath. It seems Sen. Durbins vendetta has blinded him to whats best for consumers. And thats very unfortunate.
Frank Keating is president and CEO of the American Bankers Association and former governor of Oklahoma.
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.
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.
But he meant well, that's what counts!