Former White House Press Secretary and current Fox News commentator Dana Perino warns consumers that there's trouble brewing in Congress. This trouble could make debit card purchases substantially more costly. To be clear, it will really affect almost all consumer purchases and debit card interchange fees could be the cause, claims Perino.

Article Source: Fast cash debit card amendment hits consumers in the wallet

Debit card fees might mean quick cash loans 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 money now debit card interchange rates. As Dana Perino says they're, an interchange rate is "money that a retailer's bank pays your bank whenever you use your credit or debit card at their store." This money is a valuable resource to many of the 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 many of these cases, this would drive them to larger, more impersonal banks that won't have as much competition and can charge more for credit services. Consumers who balk at this could have to rely on cash, checks or cash until payday loan secured loans for their transactions, which offer no insurance on the back end within the event of fraud.

Dick Durbin's amendment sullies advances in financial reform

Consumers have the pictures painted for them by Dana Perino also. Imagine what retailers will do if debit card transactions cost them more. Of course they'll pass the cost on to customers. Some retailers do this already, but with Dick Durbin's financial reform law amendment, it would become commonplace. In addition, no-fee checking would more than likely disappear, along with various rewards programs as banks look to make up for income lost after the Durbin amendment.

Price controls do not work

Price controls of this nature have not found much success, historically. The blog Wizbang uses the example of gas prices in Hawaii. Australian legislation from 2003 is an example. At that time, retailers began to charge extra for consumers paying with plastic, and the trend has continued. 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 secured loans with no credit check a lot more often.

More info on this topic

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