Debit Durbin

ScreamingEagle

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Goodbye free checking and now hello to debit card fees.......moving costs from big retailers to the customers.....gee thanks Dicky D....is this what you Dimwits call paying a "fair share".....and helping the American people by losing even more jobs....?

Read the headlines -- and your bank statement -- and weep, but don't say TAS didn't warn you.

As I detailed here in February in "Dick Durbin Is Stealing Your Free Checking," thanks to price controls on debit card transactions from the Durbin Amendment of the 2010 Dodd-Frank "financial reform" law, free checking is going the way of the dodo bird. The Durbin price controls on interchange fees -- the so-called "swipe fees" that retailers pay to bank and credit unions that process debit card transactions, go into effect this Saturday, October 1, and are already showing more dire effects than originally predicted.

Not only is free checking disappearing at a rapid pace -- a new Bankrate.com survey detailed in USA Today found that only 45% of non-interest bank checking accounts are free, down from 65% in 2010 and 76% two years ago, and that the average monthly fee for non-interest checking accounts is $4.37, up 75 percent from last year -- but ordinary Americans will soon be hit by new monthly fees for using their debit cards. And new evidence shows that the price controls may be causing thousands of job losses as well.

On Thursday, Bank of America announced a new $5 monthly fee for debit card usage, citing the Dodd-Frank price caps that will force retailer interchange fees down from an average of 44 cents to 21 cents and cause banks to lose half their revenue from this service. Senate Majority Whip Dick Durbin (D-Ill.) blasted Bank of America and disclaimed any responsibility for his measure causing these new fees. "It's overt, unfair and I hope their customers have the final say," Durbin told the Hill.

But thanks to Durbin's rule, BofA's customer and other ordinary consumers may have nowhere to go. According to the Associated Press, regional banks are following suit: "SunTrust, a regional bank based in Atlanta, began charging a $5 debit card fee on its basic checking accounts this summer. Regions Financial, which is based in Birmingham, Ala., plans to start charging a $4 fee next month."

The American Spectator : Debit Durbin
 
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8537

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I though consumers bore all the costs of taxes and regulation anyway? So this isn't an additional expense, it's just a more transparent fee.
 
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ScreamingEagle

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I though consumers bore all the costs of taxes and regulation anyway? So this isn't an additional expense, it's just a more transparent fee.
the retail customer does not get any tax write-off benefit whatsoever....who do you think is keeping the difference....?
 

8537

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I though consumers bore all the costs of taxes and regulation anyway? So this isn't an additional expense, it's just a more transparent fee.
the retail customer does not get any tax write-off benefit whatsoever....who do you think is keeping the difference....?
According to conservatarian economics wherein all taxes are paid by the consumer, the tax writeoff shows up to the consumer as a reduced cost for the product.
 

Claudette

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Looks like more "unintended consequences".

Wells Fargo, my bank, will be doing the same thing.

Guess I'll be going to the local credit union for my banking.
 
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ScreamingEagle

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I though consumers bore all the costs of taxes and regulation anyway? So this isn't an additional expense, it's just a more transparent fee.
the retail customer does not get any tax write-off benefit whatsoever....who do you think is keeping the difference....?
According to conservatarian economics wherein all taxes are paid by the consumer, the tax writeoff shows up to the consumer as a reduced cost for the product.
so now you get to pay full price......dicked again by Dicky D and the Dims....
 

Soggy in NOLA

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I though consumers bore all the costs of taxes and regulation anyway? So this isn't an additional expense, it's just a more transparent fee.
Why did we need more fees/taxes or whatever cute nomenclature you wish to use?
 

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I though consumers bore all the costs of taxes and regulation anyway? So this isn't an additional expense, it's just a more transparent fee.
Why did we need more fees/taxes or whatever cute nomenclature you wish to use?
The fees from credit cards and debit cards are charged to the retailer. The retailer turns around and raises his prices . . . on everyone.

The law moves the fee to the consumer. Now the consumer is responsible for his spending. This way the jagoff who is always swiping his debit card for a pack of smokes doesn't raise prices on the groceries which I pay for using cash.
 
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ScreamingEagle

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Looks like more "unintended consequences".

Wells Fargo, my bank, will be doing the same thing.

Guess I'll be going to the local credit union for my banking.
smart move...

The consequences are not "unintended".....they know.......Durbin is helping his Big Retail friends and lobbyists by helping them get rid of their transaction costs......he is doing that by telling the banks what they can and can't charge Big Retail.....so the banks are now just going to get their transaction costs in other ways....i.e. charging you directly $5 per month ($60/yr).....whether you buy $10 or $10,000 worth of goods...

Who made Dick Durbin the "Arbiter" of managing business costs.......? And why does he get to favor Big Retail over Banks....?

and does anybody really think Big Retail stores are going to lower their prices as a result of this?...:lol:
 
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StevenC

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Anyone notice that everytime the Obama admin adds another regulation to banks we get hit with more fees?
CC fees going up.
Overdraft fees going up.
Late fees.
and now this.
Thank you Obama and Dems. How do you plan to screw us next?
 

8537

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the retail customer does not get any tax write-off benefit whatsoever....who do you think is keeping the difference....?
According to conservatarian economics wherein all taxes are paid by the consumer, the tax writeoff shows up to the consumer as a reduced cost for the product.
so now you get to pay full price......dicked again by Dicky D and the Dims....
Well, no. That's not right.

First of all, conservatarian economics tells us I was already paying full price because the company was simply passing on the additional fees to the consumer.

Second, I don't bank with Bank of America. Nor will I ever bank with them.
 

8537

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I though consumers bore all the costs of taxes and regulation anyway? So this isn't an additional expense, it's just a more transparent fee.
Why did we need more fees/taxes or whatever cute nomenclature you wish to use?
We don't have "more" - we're simply replacing one fee with another. And according to the vaunted rightwing economists, consumers were paying the previous fee anyway. So this just makes the fee more transparent.
 

Jarhead

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I though consumers bore all the costs of taxes and regulation anyway? So this isn't an additional expense, it's just a more transparent fee.
the retail customer does not get any tax write-off benefit whatsoever....who do you think is keeping the difference....?
According to conservatarian economics wherein all taxes are paid by the consumer, the tax writeoff shows up to the consumer as a reduced cost for the product.
yes...but reduced or not, it is a new cost to the consumer.
 

Jarhead

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I though consumers bore all the costs of taxes and regulation anyway? So this isn't an additional expense, it's just a more transparent fee.
Why did we need more fees/taxes or whatever cute nomenclature you wish to use?
We don't have "more" - we're simply replacing one fee with another. And according to the vaunted rightwing economists, consumers were paying the previous fee anyway. So this just makes the fee more transparent.
No sir.
Retailers are not lowering their prices due to the fact that the fee has been transferred to the bank account holder.
So we are still paying for it through the retailers AND now paying it directly to the bank.
 

8537

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the retail customer does not get any tax write-off benefit whatsoever....who do you think is keeping the difference....?
According to conservatarian economics wherein all taxes are paid by the consumer, the tax writeoff shows up to the consumer as a reduced cost for the product.
yes...but reduced or not, it is a new cost to the consumer.
No, it's not a new cost - previously, the price was simply imbedded in other areas (namely, the fees for debit card swipes which were reduced by recent legislation). According to the theory that firms pass on costs, this was simply a shift in where the fee is collected not from whom it's paid.
 

8537

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Why did we need more fees/taxes or whatever cute nomenclature you wish to use?
We don't have "more" - we're simply replacing one fee with another. And according to the vaunted rightwing economists, consumers were paying the previous fee anyway. So this just makes the fee more transparent.
No sir.
Retailers are not lowering their prices due to the fact that the fee has been transferred to the bank account holder.
Why not? if their taxes and fees changed, and if consumers pick up the taxes and fees channeled through price, why wouldn't they reduce price?
 

Jarhead

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According to conservatarian economics wherein all taxes are paid by the consumer, the tax writeoff shows up to the consumer as a reduced cost for the product.
yes...but reduced or not, it is a new cost to the consumer.
No, it's not a new cost - previously, the price was simply imbedded in other areas (namely, the fees for debit card swipes which were reduced by recent legislation). According to the theory that firms pass on costs, this was simply a shift in where the fee is collected not from whom it's paid.
I disagree.

the fees to swipe were charged to the retailers...correct?
Have you noticed any decrease in the cost of products sold by the retailers?
 

Jarhead

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We don't have "more" - we're simply replacing one fee with another. And according to the vaunted rightwing economists, consumers were paying the previous fee anyway. So this just makes the fee more transparent.
No sir.
Retailers are not lowering their prices due to the fact that the fee has been transferred to the bank account holder.
Why not? if their taxes and fees changed, and if consumers pick up the taxes and fees channeled through price, why wouldn't they reduce price?
Becuase they haven't.
Why?
Why should they.
They were selling the products at the prices they were at....why reduce it?
 

Jarhead

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the only time you see a drop in retail prices is after there is a dramatic rise due to a shortahge of the prodcut (for natural disaster reasons..or something similar)...

But retailers will most definitely not drop their prices becuase of the lower cost to accept debit cards.
 

8537

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No sir.
Retailers are not lowering their prices due to the fact that the fee has been transferred to the bank account holder.
Why not? if their taxes and fees changed, and if consumers pick up the taxes and fees channeled through price, why wouldn't they reduce price?
Becuase they haven't.
Why?
Why should they.
They were selling the products at the prices they were at....why reduce it?
They would reduce it because an input price has gone down.

if the argument is that firms raise prices commensurate with an increase in costs such as a tax, it would follow that competition would force firms to reduce prices commensurate with a decrease in costs.

For example, if the government abolished the gas tax at all levels tomorrow we would expect the price of gas to decline, correct? If we removed the subsidy on corn we would expect the price of corn to rise as well, yes?
 
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