Senator Dick Durbin (Image via Wikipedia)
Those poor big banks, with the impending legislation being pushed by Illinois Senator Dick Dubin they’re going to lose significant income from credit card interchange fees. Fees that, thanks to Visa and MasterCard have steadily risen for no noticeable reason and get passed to consumers through the merchants. Chase CEO Jamie Dimon called the legislation, “price-fixing at its worst, ” and “downright idiotic.” Chase, among other large banks, are now threatening to raise foreign ATM fees to $5 and place caps on debit card purchases to recoup the lost income. Mr. Dubin decided to call him and the other banks out on their BS by releasing an open letter to them.
He doesn’t actually get around to telling him to shove it, but he might as well.
Full details on The Consumerist – here.
Going with the argument that our free market will settle this dispute on its own just doesn’t hold water. The problem is that when it comes to credit card companies you’re limited to four real choices, Amex, MasterCard, Visa and Discover. As someone that’s worked with credit card processing companies I can tell you that none of those choices has reasonable interchange fees. Unfortunately the banks’ addiction to money will ultimately end up screwing the consumers regardless of any regulation in place (i.e. increased ATM fees and debit purchase restrictions). Some have mentioned that Durbin has got powerful merchant lobbyist groups backing him on this, if that’s true, shame on him for not actually doing this for the right reasons, the consumers.
Related Articles
- Senator to JPMorgan CEO: Stop whining (money.cnn.com)
- Chase Bank Blames Dem Senator For Taking Away Your Disney Dollars (huffingtonpost.com)
- “Debit card swipe fee reform pits big banks against merchants” and related posts (bizmology.com)
