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“The banks sold us all on the idea of a cashless society, and now that we’ve bought into their promise of free, easy access to our own money, they want to charge us for it,” Clemens, who served as Lake Worth mayor before coming to Tallahassee, said in a statement. “Anyone with a sense of decency should be outraged.”
Read more of what Jeff Clemens has to say.
Maybe Clemens should ask who in Washington created this fee. He belongs to the same party. The banks are simply attempting to replace what the government took away from them with the Durbin Amendment.
ReplyDeleteA rundown of the Dodd-Frank Act
The Senate voted on July 20 to set new limits on swipe fees for retail businesses, as part of the massive Dodd-Frank finance bill, clearing the bill for approval by President Obama. These limits are being seen as a financial victory for both retailers and consumers alike. Even though you don't pay them directly, credit card swipe fees have probably had a huge impact on your finances. Each time you make a purchase from a retailer with your credit card, the retailer must pay a debit card interchange fee, better known as a swipe fee, for being able to accept the credit card charge.
These fees are often as high as 2 percent per transaction, and in 2008, represented $48 billion, which was paid by retailers to Visa, Mastercard, and card-issuing banks, and ultimately meant higher prices for consumers. In fact, after labor costs, swipe fees are the second-largest expense for convenience stores and gas stations.
Part of the Dodd-Frank Act, called the Durbin Amendment, provides credit-card fees to retailers and consumers alike, and attempts to ensure that swipe fees are proportional to the actual charges incurred by using credit cards to conduct business. Setting limits on swipe-fee increases are important, because while most retailers have seen a fall in profits in recent years, the cost for them to accept credit cards has doubled since 2003.
Some of the provisions of the Durbin Amendment that will assist retailers include ensuring that retailers have access to at least two debit card networks, since currently, card networks can require that retailers only have one network option of how to run their cards. Retailers would also be permitted to set minimum purchase limits for card use, so that they aren't found in situations where the cost of the transaction would exceed the money made. Finally, retailers would have the option of offering discounts to customers for paying with cash or debit cards.
In addition to lowering the cost for retailers to accept credit cards, this bill will encourage competition among credit card issuers as well; the element of choice between card networks will mean that the old system of card monopolies cannot force retailers to use a network with high swipe fees.
-Seth Berger
Very detailed explanation....spending years in retail we always loved those who paid cash. No fees to worry about thus no raising of prices to compensate for the fees.
ReplyDeletePlease note that most retailers especially the small business person have to raise their prices because of excessive credit/debit card fees but they really do not have a choice because that is how the consumer spends now days.
With that in mind if there are limits placed on the credit card/debit card issuers the result is....if they can not make the money off the retailers then they go after the consumer thus now we have fee's showing back up AGAIN (this is not the first time folks) that we as consumers are paying for big banks to keep those bottom record breaking profits from falling.
I have also worked in the banking industry and have seen both sides of the coin...What is worse is that most big banks including mortgage service and collection companies absolutely LOVE when the economy tanks...WHY? Because people run late and default which results in increased collections that results in additional fees from their clients not to mention the billion dollar late fees that they make....
On the individual level my household is choosing by default that we only spend what we can buy for cash and no luxury or non-necessities are very limited...No charge cards equals no fees, rearranging our finances to ensure we are not paying late fees and reducing all interest we are paying and helping our local merchants by paying cash when we can. Is this ideal? No but its a start...Remember even paying by cash the retailer will make a deposit and the banks may turn around and charge a fee for the retailer to have that account but at least we can cut out the credit/debit fees.
It is a cycle of trade were everyone profits with the exception of the small business person for which every penny counts. So please spend locally and pay cash when you can.
Robert Waples
Good, let's hope this goon can do something good while in office. I don't have much hope anymore for many politicians, Clemens sucked as mayor in Lake Worth, did little and caused a lot of problems, dissed a lot of citizens. Let's hope he can do one thing good!
ReplyDeleteFlorida is one of only 14 states that allow banks to go into your "other" accounts to "offset" (steal) money for payments if you fail to make them on loan accounts.
ReplyDeleteI hope Clemens checks into that law allowing banks make obscene profits. It is not ethical or moral. If you decide you can't make a payment on a certain loan, the banks should not be allowed to take money from your checking or savings accounts to make up for the loan payment without due process.
The banks ARE the ENEMY!!! They control governments. They control business. Just look what happens when they decide not to lend to people and businesses even though we bailed them out.
Absolutely disgusting. "OCCUPY THE BANKS"!!!!
The Swipe Fee cap was supported both by democrats and republicans and it was a battle between big retail and big banks (although credit unions also were on the side of big banks against the cap). Big retail promised that they would reduce costs if they got the cap and they have not. Big banks promised that they would have to seek fees elsewhere or push people to use credit cards which is exactly what they are doing (the swipe fee caps don't apply to credit cards). I have not seen any prices fall so I'm blaming big retail.
ReplyDeleteFrom the Hill.com "As part of debate on Wall Street overhaul, the Senate passed, 64-33, legislation championed by Durbin that drew significant Republican support." as to the Durbin amendment.
The problem is big retail and big banks are both lobbying repubs and dems and neither party seems to care about us.