Amendment for quick payday debit card hits consumers in their wallet

Former White House Press Secretary and current Fox News commentator Dana Perino warns numerous of the consumers that there’s trouble brewing in Congress. This trouble could make debit card purchases considerably a lot more expensive. It will really affect nearly all consumer purchases and debit card interchange fees can be the cause, claims Perino.

Article Resource: Extra cash debit card amendment hits consumers within the wallet By Personal Money Store

Debit card interchange fees mean fast cash for banks

Courtesy of an unheralded amendment to the financial reform law as it is being pushed by Illinois Senator Dick Durbin, the Federal Reserve would take control of cash until payday loan debit card interchange rates. As Dana Perino says they are, an interchange rate is “money that a retailer’s bank pays your bank when 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 difficult for these smaller banks to offer basic 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 numerous 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. All of the consumers who balk at this could have to rely on cash, checks or fast short term personal loan for their transactions, which offer no insurance on the back end in the event of fraud.

Financial reform advanced by Dick Durbin's amendment

Dana Perino also paints the picture for any consumers. If debit card transactions cost them more, imagine what retailers would do. Customers may have the cost passed to them. Most retailers already do this. In addition, no-fee checking would probably end up dying off, 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 in the past. The blog Wizbang uses the example of gas prices in Hawaii. Dana Perino points to Australian legislation from 2003. Then the retailers decided to charge more for plastic and has continued that way. What Perino is 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 unsecured personal loans with no credit check a lot more often.

Citations

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