Swiping Fee

           There is a special-interest battle going on in Washington D.C. that affects all of us “consumers”. Currently, there is a provision headed by Illinois Senator Dick Durbin, which would require the Federal Reserve Bank to place a cap on the “fees” banks charge retailers every time a customer uses their debit cards in their stores. This draft would slash more than $12 Billion in bank revenue annually by capping the “fee” to 12 cents per transaction. According to a recent Federal Reserve study, banks currently charge on average 44 cents per transaction. Banks are saying that consumers will feel the burden as they will come up with alternative measures to make up for the lost revenue. A couple ways they will recoup potential lost revenue is by charging more for ATM fees and eliminating free checking accounts. Dan DeLawder, the chairman and CEO of Park National Bank in Newark, Ohio, who helps lead an American Bankers Association task force on the fees said, “If you are nicking into our profits, we will find another way to recover that.”

            I do not know if this statement bothers anyone else, but I sort of cringed when I heard this. Did we not just bail out the banking system not too long ago? This CEO of a major bank just threatened to come up with ways of making a profit even if there is a cap put on “fees” collected. Why couldn’t they have incorporated these changes in a timelier manner to avoid needing a government bailout? I guess that question will remain unanswered.