Published on: December 20, 2010
Responding to last Friday’s story about the Federal Reserve proposal that a cap of 12 cents per transaction be put on the interchange fees charged by banks for debit card transactions, one MNB user wrote:I go shopping all the time without cash and choose not to use any card that would charge me any type of fee to use their card. I have not paid one fee other than when I fail to plan properly and end up using another bank’s ATM but I’ll take credit for my own errors. When are people going to start taking responsibility for there own actions. If you want to go into debt up to your eyeballs and end up with credit so bad that the only way you can use you’re ATM cards is to pay a bank a fee to use them, then that’s your problem. No one forced you into your situation.
We don’t need a government to go around telling every single business when and where they are allowed to make money. It’s absolutely none of their business! Some might argue the only reason the ATM fees are so high is a direct result of the government’s unconstitutional interference by restricting banks from making profits in just about every other area of their business. It’s just another way for liberal to steal from some and give to others (redistribution of wealth). What always gets lost is that its not just a big bad banker but the people your stealing from are ordinary people invested in 401k’s stocks, IRA that have investments in banks that the government is stealing from. Social justice from socialists.
I’m not worried though because the tide is turning in a big way so all you liberals can get your tissues out now and get ready to feel sorry for yourselves again.
First of all, just to be clear, this email is from a different MNB user than the one who offered a similar sounding diatribe last week. (I told you he wasn’t alone.)
Second, this strikes me as a classic case of someone who wants to have both his own opinions and
his own facts. It also strikes me as a textbook case of knee-jerk ideology being a substitute for actual thought, to paraphrase Pete Hamill.
As I understand it, this proposal has nothing to do with fees charged directly to consumers. That is a different thing entirely.
This proposal would restrict banks’ ability to charge usurious fees to retailers taking their cards - fees that the retailers have limited ability to appeal, challenge or negotiate. Consumers don't see these particular fees....but they (and that means you) are paying them indirectly. Retailers pay them, which forces them to raise prices to cover them. If those retailer fees go down, then, conceivably, prices go down.
If some retailers don't lower them and keep the profits, which certainly could happen, then other retailers can argue that they have lower prices and say why ... which is my idea of a free market economy...not the virtually unregulated monopoly that the banks have now.
US debit card fees are the highest in the world. This brings them into line...it is seen as being good for business and consumers, which is why so many trade and business associations (not normally bastions of liberal/socialist thought) are backing the Fed on this.
We have to get past the point where every regulatory proposal gets seen as a liberal/socialist threat to all that has made America great ... just as, by the way, we have to get past the point where every problem is seen as an excuse for a new set of regulations.
On the same subject, another MNB user wrote:I can't imagine that the banks are simply going to walk away from $15 billion of annual revenue. They will certainly find another way to bring in that revenue, and probably reduce the debit card services they provide.
Maybe. But at least the charges and services they have should be a little more transparent. And competition between banks could create an environment in which maybe all prices won’t go up and all services will be reduced.