The title of this blog post which mirrors the title of the Cnn.com piece is definitely misleading.
The Federal Reserve is trying to limit the amount of money banks earn off of debit card transactions to 12 cents per swipe. Currently they earn about 1.14% or 44 cents per transaction.
Remember the “Credit Card Reform” that was signed into law a year or so ago was supposed to help all of us? Well many Americans saw their credit limits decreased or their accounts closed due to the added restrictions placed on their banks by the government. I doubt many Americans would now agree that this credit card legislation was all it was supposed to be.
We have seen articles in recent weeks where banks are ending free checking accounts and will be charging increased fees in other areas in an attempt to make up the difference in their revenue due to government legislation. Adding additional restrictions on banks will only further damage the economy and hurt consumers. JP Morgan is threatening to deny all debit transactions over $50-$100 if this is enacted.
So although Cnn.com may want the average liberal reader on its website to believe that “Wall Street” and bankers are throwing a fit over 12 cents it’s simply not the case. If the Fed gets its way this will result in billions of dollars of lost profits, and change the way the American consumer has become accustomed to shopping and banking.
Leave private industry alone and let consumers and businesses decide on their own whether they want to pay these fees.