Amendment for instant money debit card hits consumers in their wallet

Dana Perino, previous White House Press Secretary and current Fox News commentator, warns consumers that there’s trouble brewing in Congress. This might make using a debit card more expensive. To be clear, it will really affect almost all consumer purchases and debit card interchange fees will be the cause, claims Perino.

Article Resource: Small cash loans debit card amendment hits consumers in the wallet By Personal Money Store

Debit card fees might mean emergency money for banks

Courtesy of an unheralded amendment to the financial reform law as pushed by Illinois Senator Dick Durbin, the Federal Reserve would like to be able to take control of cash until payday loan debit cardinterchange rates. As Dana Perino describes them, an interchange rate is “money that a retailer’s bank pays your bank whenever you use your credit or debit card at their store.” This money is a valuable resource to smaller financial institutions; without interchange rates, it would be difficult for these smaller banks to offer basic services to their customers.

If the Federal Reserve were to cut off some of the income stream, smaller banks would have no choice but to pass on the cost to customers. In numerous cases, this would drive them to larger banks that won’t have as much competition and can charge a lot more for credit services. All of the consumers who balk at this can have to rely on cash, checks or fast installment loans for their transactions, which offer no insurance on the back end in the event of fraud.

Financial reform advanced by Dick Durbin's amendment

Dana Perino paints the picture for consumers on the retail end also. Imagine what retailers will do if debit card transactions cost them more. Of course they’ll pass the cost on to customers. Most retailers already do this. In addition, no-fee checking would die, along with various rewards programs as banks look to make up for income lost after the Durbin amendment.

Price controls don't seem to work

Price controls haven't worked in the past. The blog Wizbang uses the example of gas prices in Hawaii. Another example is Australian legislation from 2003. Retailers began charging more for plastic then. What Perino is wondering is how something like the Dick Durbin amendment can sneak in without much attention, and will these consumers have to depend upon fast cash short term loans with no credit check more often.

Citations

Fox News
foxnews.com/opinion/2010/06/04/dana-perino-dick-durbin-senate-amendment-federal-reserve/
Wizbang
wizbangblog.com/content/2006/05/08/why-price-controls-dont-work.php