Major US banks and credit unions have formed an alliance to push
US consumers into lobbying against the government’s proposed
restrictions to interchange fees under the Dodd Frank Act.
The Electronic Payments Coalition has launched an aggressive
advertising campaign, implying that banks will eliminate debit
cards if the Act is passed and consumers continue to use their
cards for purchases.
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A poster bearing the slogan: “Washington is
helping you clean out your wallet” reads:
“A new regulation will make your debit card
more expensive, less convenient, or disappear altogether.”
Another poster by the National Association of Federal credit
Unions urges: “Do the right thing for America’s consumers. Stop the
interchange rule.”
According to a survey by the Independent Community Bankers of
America (ICBA), banks will implement higher debit card fees and
implement restrictions for debit card use to make up for the loss
of the so-called swipe-fees they charge retailers when consumers
pay by card.
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By GlobalDataBanks claim they will no longer be able to issue cards and
warned they will abolish free accounts and other charges for
banking services to make up for the loss of swipe-fee income.
ICBA’s chairman and chief executive, Camden Fine, said:
“Implementing this deeply flawed proposed rule will hurt our Main
Street customers because merchant costs associated with debit card
acceptance will shift to consumers and small
businesses.”
The ICBA survey of community banks found that:
- 93% of community banks say they will be required to charge
their customers for services that are currently free; - 72 % say they will have to implement annual or monthly charges
for use of a debit card; - 61% say they will have to impose a minimum balance
requirement; - 50% say they will have to impose a charge each time a customer
uses their debit card; - 65% say they will have to raise their qualification standards,
either by strengthening debit card qualification thresholds or
closing higher-risk transaction accounts; - Nearly 20% say they will have to eliminate jobs or halt plans
to open new bank branches.
The Dodd
Frank Act was passed in the US Senate in July 2010 and is to
slash the fees that banks charge merchants for card transactions by
80%.
Although there is an exemption from the Act for banks with
assets of less than $10bn, some small banks and credit unions argue
that they will be disadvantaged if the Act goes through, enabling
merchants to favour cards with lower swipe fee
