Durbin Taxes Banks through Debit Fees

From Forbes.com

Recently, Bank of America announced what many other banks have been doing as a pilot program, which is to charge consumers a monthly fee (five dollars a month) for the debit card that they have issued. Senator Durbin was outraged at Bank of America for charging this fee to consumers for a service they provide.

The Federal Reserve Board studied the profitability of debit

cards for the banking industry and they settled on the 22 cent fee cap for banks to earn if they are 10 billion or larger for their interchange fees. Why is a 9 billion dollar bank different than an 11 billion dollar bank?

Why does Dick Durbin get to decide what is a fair profit? Why does Dodd Frank give the Federal Reserve Board the power to decide what a bank should make when offering this service? If Bank of America is charging too much for the debit card, consumers will not use it. They will go to another bank. If Bank of America’s interchange fee is too high; merchants canrefuse to accept it. Why can’t Americans and American businesses decide what to buy and what not to buy and at what price?

Is the government going to use this example to decide what banks can charge clients for loans, checking accounts or other services?

To read more, visit:  http://www.forbes.com/sites/thesba/2011/10/04/why-the-durbin-amendment-to-the-dodd-frank-bill-is-just-a-hidden-tax-on-the-banking-industry-in-an-attempt-to-re-channel-funds-and-revenue-to-the-retail-industry/

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