When you pay the new monthly fee for making debit card transactions starting this month, don't blame Bank of America or your other choice of bank for this one. You can thank Dick Durbin for sticking a little amendment into one of our biggest oxymoron of bills in recent history, the Dodd–Frank Wall Street Reform and Consumer Protection Act. Rush reiterated this on Tuesday's program...
Rush says Durbin's actions were "downright, plain, old-fashion stupid," and he's right. Any time government restricts business of any kind, businesses adjust in order to compensate for that loss, which nine times out of ten means that cost will be passed on to the customer. In this instance, we once again see that government regulation affects businesses in the same manner as increased taxation, with similar results of increased consumer costs or layoffs or shareholder loss.
The Washington Examiner reported on October 1st:
If we had a "Dim Bulb of the Year" award, we would give it to Sen. Dick Durbin, D-Ill. How better to honor someone who so ostentatiously proposes a policy with obvious unintended consequences, then gets angry when they predictably come to pass?
During the debate over the Dodd-Frank financial reform bill, when Democrats controlled Congress, Durbin insisted on including an amendment that had nothing to do with Dodd-Frank's stated aims of stable banks and consumer protections. The Durbin amendment granted regulators the authority to establish price controls on what banks could charge merchants that accepted their customers' debit cards as payment. The resulting regulations, which took effect Oct. 1, limit what banks can charge merchants to no more than 24 cents per debit card transaction.
Critics pointed out that banks, facing $6 billion annual losses from this change, would shift the costs of debit cards from merchants to bank customers. Sure enough, Bank of America and several of its largest competitors -- including Wells Fargo, PNC, HSBC, SunTrust, TDBank, and Chase -- will be imposing various new fees on their customers to make up for Durbin's folly.
So be sure to 'thank' Dick for this one. This little YouTube video, using the above Washington Examiner piece, sums up that 'thank you' quite nicely...
