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Politico reports this morning about the continuing arguments on both sides of the announcement by Bank of America that it will begin charging a $5 per month fee for the usage by consumers of debit cards to buy products - a move made after new financial services regulations put limits on the “swipe fees” that could be charged on debit and credit card transactions.

In an interview with ABC News, President Barack Obama addressed the controversy: “This is exactly why we need this Consumer Finance Protection Bureau that we set up that is ready to go ... This is exactly why we need somebody who's sole job it is to prevent this kind of stuff from happening. ... You can stop it because if you say to the banks, 'You don't have some inherent right just to - you know, get a certain amount of profit. If your customers - are being mistreated. That you have to treat them fairly and transparently."

To which, Politico reports, American Bankers Association President Frank Keating, responded: "It's disappointing and puzzling that the President would attack a private corporation for responding to government price fixing that has fundamentally altered the economics of offering a debit card. As a direct result of the Durbin Amendment, consumers have started paying for financial services they previously enjoyed free of charge. Unfortunately, this proves that whenever government tries to control pricing of a product or service, consumers lose."
KC's View:
Once again, it strikes me that President Obama is almost tone deaf on this issue ... and that he missed a great opportunity to tell the right story.

The thing is, it seems to me that people in favor of financial services reforms should be applauding the Bank of America move ... and suggesting that this proves that the reforms are working. After all, swipe fees were invisible ... people were paying them, they were raising the cost of goods, but consumers (and even many retail employees) were unaware of their existence. All they knew was that banks spent tons of money trying to get people to use signature-based debit cards, which had expensive fees attached to them, and they responded to those campaigns by using them.

Now, because limits have been put on swipe fees - which, by the way, opponents should forever label “invisible swipe fees” - banks have to be more transparent about the fees they charge.

This isn’t about government determining how much profit a company can fairly make. It is just about making sure that how companies make those profits, on the backs of unsuspecting and, quite frankly, susceptible consumers, is completely transparent. In the end, if we know more, we can vote with our feet and our wallets. Which strikes me as utterly fair. And appropriate.

Obama has to get the message right. Because if he does, vampires like Keating will have to crawl back into their gilded holes and worry about being exposed to daylight, and what that will do to them. And as we all know, sunlight ain’t good for vampires.