On April 21st, the Federal Reserve’s deadline for finalizing its regulations on debit card transaction fees, also known as ‘interchange costs’, passed without any action being taken. Controversy over the regulations has caused the Fed to delay finalizing them, and banks have taken to Twitter to continue their campaign to delay the rules for at least another year. The ‘Save My Debit Card‘ campaign has asked people to share why they love their debit card, despite the fact that the proposed policies would not affect debit cards. Individuals have tweeted about the convenience of using debit cards, their ability to track spending, and the environmental benefits of avoiding paper waste. The proposed policies would limit the size of the per-transaction fees that merchants provide to banks, but only for banks with more than $10 billion in assets. Merchants have promised that the savings in fees would be passed on to consumers, though this is not guaranteed. Banks have warned that they may end debit card rewards, increase ATM fees, remove ‘free‘ checking, or limit the size of debit purchases. These threats have caused some consumers to oppose the regulations. Big banks have also made timely contributions to the campaign coffers of Sen. Jon Tester, the Montana Democrat who proposed the legislation to postpone the rule. Here’s The Hill:
Six days after Tester introduced his legislation, which would delay implementation of the regulations by between 12 months and 18 months, executives at TCF Financial gave his campaign nearly $16,000 in contributions, including $9,000 from the company’s political action committee.
That same day, Tester received $500 contributions from two executives at Wells Fargo; $2,500 from Richard Davis, president and CEO of US Bancorp, as well as $1,000 from the company’s political action committee; $1,000 from Bank of America’s PAC; and $1,500 from Discover Financial Services’ PAC.
A few days later, the American Bankers Association delivered a $5,000 contribution.
The banking industry and the traders coalition have each hired more than 100 former government officials to lobby for their interests, according to the Sunlight Foundation. This intense lobbying has left many consumers feeling confused about the law and who stands to benefit. On Twitter, one user wrote, “Preserve the government from taking more of our hard-earned money,” while another commented, “I love my debit card because I can use MY money for things I need rather than pay for all those bank CEO ‘bonuses’.” It appears that these individuals may need more information and explanation on the matter.
