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U.S. Senator Plans Bill to Kill Swipe Fee Reform Senator Rand Paul tells his credit union constituents that he is planning to introduce legislation that would repeal the Durbin swipe fee reform amendment.“If we don’t get it [debit interchange] right, that credit union or community bank in your town isn’t going to be there and you will be left with larger institutions,” said Bachus, according to the Credit Union Times. Rep. Debbie Wasserman Schultz (D-FL) told attendees that the biggest threat to credit unions is capping interchange fees. “The interchange train may have left the station but it's not too late to stop it in its tracks," she said, according to CUNA’s Twitter feed.Wasserman Schultz clearly stated her position on interchange fees, noting that the current rules are deeply flawed and must be fixed. However, she claimed that merchants would still charge the same prices for goods, while pocketing the savings from interchange reform. Others members of Congress weighed in on interchange yesterday, including Rep. Ed Royce (R-CA), who said interchange should not have been added to Dodd-Frank act, and Rep. Steve Stivers (R-OH), who said the Federal Reserve’s interchange proposal “wasn’t done right,” and that he supports stopping implementation and studying the impact on credit unions.......According to CUNA, Senator Rand Paul (R-KY) told constituents that he was introducing legislation to repeal Durbin. Senator John Tester (D-MT) has made similar comments this week.
Question-How come there isnt protesting or the request of removal of these individuals? How come they are not treated like everyday regular joes? If I didn’t read something before I signing I would be held accountable, but these "politicians" get the pass. This is what’s wrong with our country that no one pays attention to. Everyone jumps on the issues that the media and particular individuals want you to pay attention to, but you have many in office committing acts like what’s described above and no one holds them accountable. And save the point that they will not be re-elected come next election, because that’s becoming a tired song and dance.
Most small businesses and associations that I am familiar with are very pleased with swipe fee reform
Capping debit IC at a reasonable level isn't that bad, but $0.12 is WAAAAY below costs
Quote from: John Galt? on March 07, 2011, 02:57:51 PMCapping debit IC at a reasonable level isn't that bad, but $0.12 is WAAAAY below costsWhat is the cost of a debit transaction?
My big gripe is that for Congress and the FED to tell for-profit businesses that they can only charge COST (cost according to their flawed calculations) is just down right UnAmerican.
Quote from: John Galt? on March 07, 2011, 06:45:33 PMMy big gripe is that for Congress and the FED to tell for-profit businesses that they can only charge COST (cost according to their flawed calculations) is just down right UnAmerican.No John, it's downright stupid. Give me one reason why I should start or run a business that is only allowed to operate by law, at cost.
Quote from: bradentonian on March 07, 2011, 05:26:23 PMQuote from: John Galt? on March 07, 2011, 02:57:51 PMCapping debit IC at a reasonable level isn't that bad, but $0.12 is WAAAAY below costsWhat is the cost of a debit transaction? There is no single cost. There are 11 different networks for pin based debit, each one a different size doing a different amount of volume. And the debit card issuing banks all have different costs. Chase going thru Interlink is different than Chase going thru Star and Suncoast Credit union going thru interlink is different than any of those as is SCCU going thru Shazaam.On top of that, the volume of transactions each network and each issuing bank handles per month changes as the economy changes. The Cost of a transaction in December is going to be less than the cost during a slow month.And on top of that, there are different risk levels for different types of merchants. Gas, electronics, and jewelry are far more likely to get stolen debit cards than a utility or a non-profit org. Restaurants are notorious for chargebacks (servers changing the tips), but grocery stores rarely have chargebacks. BoA said their cost per trans is about $0.43 but that would be an average cost IF you believe BoA. But that doesn't include the networks costs which is paid by the acquiring bank (the bank the processors use to aggregate all the transactions before forwarding them to the merchant), not the issuing bank.To throw my best guess out there, the lowest IC debit rate is Pulse and AFFN (tier 1) Supermarket rate which is $0.28/trans and is only available to Tier 1 (merchants doing over $3.0 billion/yr and 46.5 million trans/yr). So I'd guess they have about 3-4 cents profit in there.The Fed came up with the $0.12 number based on the cost to clear a check. Their (stated) reasoning was Debit transactions should clear at the same cost as checks since both come out of the same account. Which is stupid, since checks don't have fraud protection nor electronic encryption protocols nor massive nationwide computer networks to support nor provide next day funding. Also, check clearing is administered by the Fed (a non-profit quasi-government org.) while debit card processing is handled by for profit businesses.My big gripe is that for Congress and the FED to tell for-profit businesses that they can only charge COST (cost according to their flawed calculations) is just down right UnAmerican.
One of the networks was already charging a max of $0.12 before the legislation.
The reason the debit transaction is considered closer to a check than credit is that they don't have to bear the risk since funds are verified.
Also note that most local banks and credit unions will be exempt from this part of the reform because the limit only applies to institutions with over $10Bn of assets.