Amendment for instant money debit card hits consumers in their wallet

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

Resource for this article: Fast cash debit card amendment hits consumers within the wallet

Debit card interchange fees mean instant cash loans 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 pay day debit cardinterchange rates. As Dana Perino like to describe 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 extremely difficult for these smaller banks to offer the essential services to their customers.

If the Federal Reserve were to cut off the income stream, smaller banks would have no choice but to pass on the cost to customers. In many of these cases, this would drive them to larger, more impersonal banks that won’t have as much competition and can charge a lot more for credit services. Consumers who balk at this will have to rely on cash, checks or payday advances unsecured personal loans for their transactions, which offer no insurance on the back end within the event of fraud.

Financial reform advanced by Dick Durbin's amendment

Consumers have the pictures painted for them by Dana Perino also. Just think what retailers would do if transactions cost them more. Customers will have the cost passed to them. 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 following the Durbin amendment.

Controls on price don't work

Price controls haven't worked within the past. The blog Wizbang uses the example of past gas prices in Hawaii. Dana Perino points to Australian legislation from 2003. Retailers began charging a lot more for plastic then. What Perino and many other concerned consumers are 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 secured loans with no credit check a lot more often.

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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