October 5, 2011
Consumers will be happy to know that the Federal Reserve has set limits on the rates for credit card swipe fees that the banks have been charging the retailers, effective October 1, 2011.
As a result, credit card processing fees can no longer exceed twenty-one cents per transaction and 0.05% of the purchase price. This is much lower than the previous rate of from 1% – 2% of the transaction. The only drawback to this is that the banks will charge the maximum fee for purchases on small ticket items.
This new ruling is expected to save consumers about $7 billion and to help stimulate the economy. In retaliation, however, the Bank of America is charging a $5.00 monthly fee on debit cards and the other banks may follow suit.
This is one of the last regulations that the Federal Reserve Board is enacting in an attempt to regulate the banking industry. There have been many reforms over the last two years which were enacted to reduce the fees that consumers were paying for banking services. However, the bankss seem to create more fees on other products in an effort to recoup their losses.
April 15, 2011
Avoiding Use of Taxpayer money
The Obama administration has formed the The Dodd – Frank Wall Street Forum which now determines how they can safely liquidate firms instead of turning to the taxpayers to bailout these failed companies. (Click onto the tile of the article to read more about this…)
April 14, 2011
<Relief from Exorbitant Credit Card Rates and Fees
President Obama has signed a proclamation making this month of April 2011 Financial Literacy Month. One of the problems that the Obama administration changes was the fees charged on credit card balances. (Click onto the above link to the title of this article read more….)d
March 11, 2011
Recovery for The United States.
Some economists believe we have recovered from the recession. Some believe there are more problems brewing. There are three areas of concern which this article covers. Knowing the problem areas will help you in planning your business.
June 22, 2010
Senate and House members have agreed to slash the debit card fees that the banks charge to retailers and other business owners for accepting debit cards at their businesses. These fees ranged from 1%-2% of the cost of products sold by the merchants. Many of the larger retailers stand to gain several million doallrs per year as a result of this ruling. Walmart stands to gain the most as 17% of purchases are made with debit cards.
The banks are not happy and claim they may have to raise other fees to make up for the losses. An attorney for MasterCard states the losses may be passed on to the consumer. Currently, approximately 13.4% of all purchases are made with debit cards and pre-paid cards.
The Federal government will now monitor the fees costs and will be checking to make sure the fees are “reasonable and proportional to processing costs.” The following decisions were mandated by Congress:
Banks with over 10% in assets would be subject to fee oversight.
Government administered debit cards and reloadable prepayment cards would be exempt.
Merchants would be allowed to offer discounts for use of cash instead of debit.
Merchants could set a $10.00 minimum for card transactions.
It is questionable whether the banks would really stand to lose on this recent ruling because they are now stating that they may have to raise other fees to make up for their losses. The consumer stand to lose here as retailers and other merchants stand to gain. The retailers have joined to lobby Congress about credit card fees and have been fighting legislation for the last two years. They have a website which provides information on their stand on credit card fees and the action they are taking.
October 16, 2009
Once again this debate has surfaced, but now the President and a new Merchants Payment Coalition are taking this issue very seriously. The retailers and business owners want the privilege of negotiating interchange fees with the banks.
In view of the recent new credit card Legislation, this issue will probably not go away. The Merchants Payment Coalition was formed to represent 2.7 million businesses and over 50 million employees in having a voice in the assessment of interchange rates. They claim to be helping to protect the interest of the consumer. The interchange rates are the rates that retailers and other business owners pay to accept credit cards at their establishment.
In addition to the Merchants Payment Coalition, President Obama and Representative Peter Welch of Vermont are conducting studies into the rates. This issue has been a long-standing one with the retailers, who believe their rates are too high. The current economic crisis has hurt many businesses and the retailers feel lowering or at least being able to negotiate rates with the banks could help their sales.
analysts have argued that if the banks are ordered to lower their fees, the consumers could face rate higher rates and fees on their credit cards. Australia has gone through this process and consumers did not save any money as a result.