Journalism in the Public Interest

Banking Groups Stir Consumer Fears on Debit Card Regulations via Twitter


(Spencer Platt/Getty Images)

It’s April 21, and another Dodd-Frank deadline has come and gone. Today was the day the Fed’s regulations on debit card transaction fees, also known as interchange fees, were supposed to be finalized. Hasn’t happened.

Controversy over the regulations caused the Fed to postpone finalizing the rules. But that win alone wasn’t enough for the banks, which have rallied behind legislation to delay the rules by at least another year.

Today they took to Twitter to continue the push, launching a “Save My Debit Card” campaign and asking people to “tell us why you love your debit card today—and why you don’t want that to change!”

The strange thing about this campaign is that debit cards aren’t in danger—not from the proposed regulations, at least. Some consumers participating in the #savemydebitcard campaign don’t seem to know that.

Participants have been tweeting that they love their debit cards because they “hate carrying loose change,” they can track what they spend (that one’s from the spokeswoman for the group in charge of the campaign), and because “it’s easy to use and faster than writing a check.” One noted that debit cards “eliminate lbs of paper waste.”

Those are all things that the proposed rules wouldn’t actually change. The Fed’s plan would limit the size of the per-transaction fees that merchants give to banks—and that's only for banks with more than $10 billion in assets.

Merchants and banks have given indications of how this fee cap would affect consumers. Merchants have promised that what they save in fees will result in lower costs to consumers. Of course that’s not guaranteed to happen, and not everyone buys that it will.

Banks have warned they may end debit card rewards, increase ATM fees, get rid of “free” checking, or limit the size of debit purchases, as we’ve noted. These threats have caused some consumers to rally against rules that could lower the costs of the goods they purchase.   

Big banks also have made timely contributions to the campaign coffers of Sen. Jon Tester, the Montana Democrat who proposed the legislation to delay the rule. Here’s The Hill:

Six days after Tester introduced his legislation, which would delay implementation of the regulations by between 12 months and 18 months, executives at TCF Financial gave his campaign nearly $16,000 in contributions, including $9,000 from the company’s political action committee.

That same day, Tester received $500 contributions from two executives at Wells Fargo; $2,500 from Richard Davis, president and CEO of U.S. Bancorp, as well as $1,000 from the company’s political action committee; $1,000 from Bank of America’s PAC; and $1,500 from Discover Financial Services’ PAC.

A few days later, the American Bankers Association delivered a $5,000 contribution.

The banking industry and the merchants coalition have each hired more than a hundred former government officials to lobby for their interests, according to Sunlight Foundation.

All the lobbying has resulted in a good amount of spin. Some consumers still seem utterly confused about the regulation and about who would benefit.

“Keep the Government from taking more of our good hard earned money,” wrote one Twitter user. Wrote another: “I love my debit card because I am able to use MY money for things I need rather than pay for all those bank ceo ‘bonuses.’ ”

Sounds like they could use an explainer or two.

Actually, for small financial institutions such as credit unions, consumers ARE at risk for losing their debit cards. If credit unions lose the interchange income they receive from merchants, they will no longer be able to afford to run their debit card programs without charging their members additional fees. Worst case scenario smaller FI’s would end up closing the debit program all together.

It might seem like a ridiculous campaign (Save My Debit Card), however nothing is clear yet whether this bill will change things for all financial institutions, or simply those over $10 billion, so right now, everyone has a right to be worried at the risk of losing their debit card.

Let’s think for a minute how those smaller financial institutions/credit unions would fair if they were no longer able to offer debit cards. Most institutions would be forced to merge into larger ones, considering they would lose most of their checking account customers to larger banks before too long anyway. This entire issue could possibly lead to the failure of numerous smaller financial institutions.

This bill could have many lasting effects that not one of us is prepared to predict, nor judge at the moment.

It’s pure horse hockey, as Colonel Potter of MASH used to say, that the banks care one iota about the convenience or inonvenience to customers.  I feel for the bankers at the branch level, who try to help, but they can’t because their Wall Street bosses won’t let them.  Banks are in business to make money.  We are planning to use our debit card less cause of some problems that we have had internally.  It is no inconvenience for us to write a check.  I’m retired so I have time on my hands.  And don’t give me this garbage about their concern for the environment that they will save paper/trees.

Hilary, I think you raise an interesting point, but I would argue that even if small banks are at risk, the campaign should certainly NOT be called “Save My Debit Card,” as if the government were trying to end the use of debit cards.  If the banking industry were concerned about the small banks you talk about (and I’m pretty sure they’re not), they should be running a “Save My Local Bank” campaign. Consumers will still have access to debit cards, even if the bank they are presently using decides not to offer them. As it is, what the banks mean is “Save Our Obscene Profits at the Hands of Merchants.”  As my dad (a manager of a small store), used to say: Consumers pay for credit cards; store owners pay for debit cards.

lolll…what do you want to bet that the banks have their call centers in India and Bangladesh pounding out tweets to generate the appearance of massive support for their goals?

I agree, consumers will always have access to debit cards in some way or another. I agree that it would better be called “Save My Local Bank” or something of the sort.
I’ve come to determine that the ones who will REALLY suffer at the hands of this bill will either be small banks/credit unions, or small merchants (who are currently suffering by paying high interchange fees). The BIG banks and BIG merchants will be fine no matter what the outcome…one of them will walk away with billions of dollars either way. It’s their fight, and we (small credit unions/banks/merchants) are the ones who will take the brunt of it. We can probably all agree on that! :)

Look how cheap it is to buy your very own Senator;
Remember banksters, having your very own Senator can make you lots of money!

“Big banks also have made timely contributions to the campaign coffers of Sen. Jon Tester, the Montana Democrat who proposed the legislation to delay the rule.”
(a) executives at TCF Financial gave his campaign nearly $16,000
(b) $500 contributions from two executives at Wells Fargo;
(c) $2,500 from Richard Davis, president and CEO of U.S. Bancorp,
(d) $1,000 from the company’s political action committee;
(e) $1,000 from Bank of America’s PAC;
(f) $1,500 from Discover Financial Services’ PAC.
(g)  American Bankers Association delivered a $5,000

I add that up to be about $28,000, or about what a mere 5.5 million Debit Card transactions at ½ cent each would add up to.

Oh… FYI - Interchange fees to the Banks average around 2% of the amount of the transaction.
BUT.. unlike Credit transactions, the money is already there, there is NO credit risk, just paper.. errr.. electron shuffling needed.

2% for electron shuffling??
Nice work if you can get it.

Stephanie Palmer

April 22, 2011, 3:18 p.m.

One thing you can always count on, the large banks NEVER, NEVER tell the truth.  Any time they can make any money at all, they will do it.  They send you all kinds of literature explaining “new” contracts.  No normal person can actually understand it, but it’s what they’re required to do.  But they don’t have to make it so esoteric.  Don’t bank with them, community banks are much,  much better.

Jon Tester should be ashamed of himself—oh yea greedy senators NEVER are ashamed of themselves.  He should be shot just like the wolves are that he delisted

Well said, Nina. And notice he’s a greedy Democrat at that.

Look, friends. We have selected capitalism as our economic system, the only system built entirely on greed. Getting upset because big banks will do anything to get even bigger is pointless. They’re just doing what they’re supposed to.

Do any of you own a business? These charges are payed by ME, so that you can get POINTS, on your credit card. Who cares about debit cards. I pay taxes and fees, every time some IDIOT wants to pay for a #7.95 salad ! Give me a break. If the credit cards want to give you a deal, for your business, they should pick up the cost, but instead…. It is passed on to people like me.

OI will not use debit cards. My credit union constantly bombards me with junk mail telling me how WONDERFUL they are and even tried to force one on me by tying it to my atm card access. I think these are nothing more than a cash cow for financial institutions and a danger for overdraft fees. We use OPM;that is,other peoples money. We have fee free credit cards that we pay off every month with no interest or fee’;s. The financial institutions have one thing in mind and that is separating a fool from their money!

I find it hard to believe that processing debit cards costs more than processing checks.  It is to the banks benefit that consumers use debit cards over cash as the funds remain on deposit till the last second and may (if the merchant uses the same bank as the customer) be redeposited immediately.  This is before you get to the free cash from merchant fees.  If customers of small banks are at risk of losing their debit cards from new regulation than they already are.  What I mean is that the networks that process ATM and POS debit card transactions don’t have to offer their services at rates that would be affordable to small banks they do it because they want more transactions.  Even if you lower the profit on transactions they are still going to want to access the customers of small banks so they will have to make the card programs affordable, just as they do now. If they do not it will not be because of regulation but because of a change in strategy.

I hardily agree with most, the banks are just a lot of expanded hot air, and we need to regulate the hell out of them. When they bitch, just shrug your shoulders and tell them tough luck, bud. They have had more than enough opportunities to be good corporations, and good citizens, but they can’t grasp it, so tough love, is what they desire. I’m sure they would then try to say there sorry, but no one can’t eat that carrort ever again. Reinstate, Glass-Steagall Act of 1933, and more on. This is a campaign issue, I will be looking for and asking about in 2012.

Thank you Sam Alieto for Citizens United, you made it all possible for crooks like Testor to scam America.

The banks will stop at nothing to fleece their customers. What ever happened to shame.

See how banks impudently employ the lewdly fraudulent profits gained from illusory “interchange fees” and other questionable transactions…they use them to further misinform and muddle the minds of many (if these are not the banks themselves operating surreptitiously) as a public relations campaign to brighten up their uncleansablly filthy images.

The banks have been clearly and publicly exposed as the rapacious thieves they’ve always been but so long as they are allowed to continue to do as they please in transacting their business in the same old fraudulent way, nothing will stop them from further poisoning the minds of the ripped off and credulous.

The basis for business of any type is “trust”. There should be no tranaction, nor discussion of business, if you can not trust the 2nd party. Seems wall street/banks, need to be brought back to trust. Tort Laws were establish to reinforce business transactions protections. WallStreet/Bankers have clearly, with malice, manipulated, violated, business practices, that fall, under procecution, of many tort laws. The voters should demand procecution, of these violators. If a candidate bawks at procecution of these criminals, then they must be in bed with them, and also investigated.


So Hilary, despite the fact that this article and others I have read indicate that this would only affect institutions with assets over $10 Billion you seem to think otherwise.

Could you point us to some information that would support your comment?

Cheyenneabode:  I agree totally with you….BOTH Democrats AND Republicans are bought and paid for by BIG BUSINESS.  They don’t care about you and I (who actually are their employers)....they will do what they are “paid” to do by big business because big business can afford to give them more money than any middle income American.  It’s a sad state of affairs that there’s NO politician in Washington that isn’t on the dole from big business, and as long as that is allowed to happen, our concerns will NEVER be taken care of.  AND, even if we vote them out and vote in others….it’ll be the same thing all over again!

The problem with putting GOP/DEM, in the same pot, is you don’t give yourself anything to work at, or even believe in. Its just saying to yourself, I give up, do nothing. Its a great tag line from the GOP, to manipulate, and get people to NOT vote. It worked great in 2010, and look what happened. The very people that took America from a surplus, to massive deficits, back i the saddle. Not smart to thrown everyone in the same pot. You can believe the Demo are working for you, but if you put the GOP spoilers in the barrel, everything looks rotton. Stand up, don’t cower under. The Demo’s listen, GOP ignores you. No government is perfect. Never been one, never ever will be one. Now look at oil prices. Who put America in harms way…....the Great Oil Party. Congrats….... you been punked again. They are laughing all the way to the bank.

WP, I would agree with you but it would appear as it relates to Wall Street and the banks we have to choose between the lesser of two evils. President Obama has surrounded himself with bankers and CEOs as advisors. He missed a golden opportunity to stand firm and really put some teeth into the Dodd-Frank legislation. Bottom line is how bad does it have to get to actually do something like break up the biggest banks and make them risk more of their own money.

Most people think that legislation actually did something to protect the people and the economy but that is only because all they know is what they were told by the talking head media.

Of course, the GOP and the financial lobbyist are still trying to gut what little was done by the bill.

I appreciate that Obama wants to compromise but it seems to me that he generally gives up too much when he has a better hand to play.

Well maybe if Obama wasn’t handed a plate of sh-t, when he arrived, this would have not happened, What choice can you think of he had with the sh-t plate he was served up? Who could he have put in office to do anything different? Can you imagine what it would have looked like today, if McCain/Palin, were elected.

WP, I assume you are responding to me. Not sure what I said that pissed you off.

I didn’t suggest that the GOP would be better, if you read and understood what I said. He appoints his advisors and that is who he selected. He and the Sec of Treasury could have fought for a tougher bill and not only did they not do so they, in fact, fought meaningful change. In my view his choice was to put up a fight to prevent too big to fail banks from bringing down the global economy again and he didn’t.

In addition, on the continuation of the Bush tax cuts. In my view he missed the chance to stand his ground. The GOP would have looked worse had they allowed unemployment benefits to lapse instead of increasing taxes on the most wealthy. The Dems even offered to make the minimum, according to Al Franken, as high at $1,000,000 and the GOP still refused. Seems hard to believe he gave in on that as well.

So, just so you can be clear on what I am saying. I think the GOP would be and are worse but Obama is not the man that I thought I had voted for either.

Not pissed off, except at how naivate, people are generally about how the government works. Nothing directed at you for sure. Sure I am not giving Obama any stellar gold star, yet no one gets all of what they want to fullfill their dream about what they want to accomplish while in office. Just the way it is. Just wonder how much better things would be, if the voters would have supported, Obama, by not putting the parasites, back in office. Hope things are bad enough, that voters will not stay at home, and do something positive, for the country in 2012.

The banks are thoroughly convinced and reinforced in their belief that they are too big to fail and our politburo is convinced that we, the working people, and our economy are too small to succeed. It doesn’t matter who we vote for they seem to loose their campaign souls within a few weeks of being in DC. Mention services to the needy and there’s a lambasting about socialism but look at communism, a handful of people deciding what’s best for everyone while they control most of the wealth. The banks and wall street shat in their food bowl and we, thanks to our politburo scrubbed them out, filled them up again so they could keep feeding on caviar while we scrimp and scrape and eat sardines and crackers. At least we’re all eating some sort of fish. Did the politburo offer any of their personal wealth that they accumulated in their war chest from these greedy infidels to help, NO! Only from the coffers of our future and tax money, interest free then some of them want to claim that Medicare And Medicaid should be abolished or weakened so much that they’re ineffective. No talk from Wasilla looney toon millionairesse about death panels have we here. Oh yeah let’s raise the retirement age and take away basic healthcare from the people that paid into the forced system so they can die off before collecting what they paid into. That’s not a death panel that’s murder, there is malice here. 
Then there’s the people I saw driving around in smoking beater vehicles with Bush/Cheney stickers on their bumpers. Why would they vote against themselves? Could it be that they’ve fallen for that American Dream crap that does hold true for some Americans but for most not. I am a small business owner and I am struggling right now to reinvent myself and my business, some of which,  failure is also due to bad business descisions, without any loans or bailouts, and I did just pay$1400.00 in SS on my meager poverty level income (net) that I produced by working part time 200+ miles from home. I have not applied for nor recieved any government assisstance or unemployment insurance in 25 yrs and by saying this I am not slamming anyone that has just a disclaimer to the paid or insulate posters that seem to populate the posting arenas. What I’m saying is the banks got bailed out for their greed and continued with payment of their bonuses. Talk about abusing the system. Isn’t this an entitlement?

Please down let my debitcard get taxed on transaction ,because its a safe way not to have to carry cash when I travel a lot.I dont have to fear a mugger trying to rob me and I cant over spend like you can with a credit card.  Thank You Rock Hoover in   WV

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