Is there any doubt in any of your minds as to how this turns out?
Reporting from Washington — Proposed limits on the hidden fees behind most debit card purchases — caps designed to bring down prices for consumers — could be changed or delayed after an outcry from the financial industry and lawmakers.
Every time a debit card is swiped, the merchant pays the bank an average of 44 cents to process the transaction. The Federal Reserve, saying the actual cost was drastically lower, proposed in December to cut the fee that large banks charge to 12 cents per transaction.
The Fed’s proposal has sparked a major battle between bankers and retailers. On Thursday, Congress and financial regulators weighed in, with the Fed even suggesting that the rules could be revised before they take effect in April.
“We are committed to doing everything we can to get this right,” Federal Reserve Gov. Sarah Bloom Raskin told a House subcommittee.
Retailers persuaded Congress last year to limit the fees, complaining that banks were gouging them in processing debit card transactions that have become increasingly popular among consumers.
The financial overhaul law required the Fed to set so-called debit card interchange fees for large banks that are “reasonable and proportional” to the costs of processing the transactions, and implement them by April.
But bankers decried the limit the Fed proposed, saying it would force them to eliminate free checking accounts or increase other fees on customers.