Durbin - Interchange Rate Increased!

[MugenOne]

The Fed initially proposed a 12-cent cap on interchange fees, which was a drastic reduction from the average fee of 44 cents per transaction, charged by banks in 2009, according to the regulator.

With several unconfirmed reports that the Federal Reserve is increasing the proposed interchange fee cap to 21 cents, investors are breathing a sigh of relief.

thestreet.com/story/11170420/1/visa-mastercard-jump-on-durbin-drubbing.html

So regardless of what you about banks in general, here is the ultimate stupidity of the Durbin legislation, and why it never should have come to pass:

1. It was INEVITABLE and understood that banks would replace that lost revenue through other means - namely, increasing targeted fees or charging for what was once subsidized by debit interchange. That comes directly out of the consumer’s pocket.
2. Banks have already implemented and are planning to implement other revenue generating countermeasures, and those will be funded by consumers.
   ANYONE anticipating that any of this interchange is going to be passed back to consumers, AND more than offset the increase in fees for banking services they will see, is incredibly NAIVE.
3. Now banks find them in a position where the government has created an excuse to evolve their fee models, AND the revenue shortfall from Durbin will not be as severe as once anticipated.

Merchants win, banks evolve and the clear loser is you and me… and that’s even if Walmart were willing to pass along 100% of that $.02 they save for every $10 I charge on my debit card. So if I spend $100 at Walmart I save $.20? Yipee!!! And you know that savings will go right to Walmart’s bottom line. You’re not going to see it, and wouldn’t notice it even if was going to be passed along to you.

I hope in a few years they audit the large retailers that spent millions to get this amendment passed, and make them prove how that savings has been passed along to Consumers.