WASHINGTON – U.S. Public Interest Group, the leading consumer lobby on Capitol Hill, called on lawmakers to reject efforts to delay implementation of the cuts in debit fees, saying the issue has been studied long enough and the cuts will help consumers.
“Consumers, overall, are going to benefit from fixing anti-competitive practices [in the cards market],” said Ed Mierzwinski, consumer program director for US PIRG.
The consumer lobbyist insisted that consumers would be more likely to benefit by government intervention in the debit market, where he said fees are now set by just two entities, Visa and MasterCard. He doubted the assertion by credit unions and banks that merchants will keep all of the fees instead of sending the lower costs back to consumers. “Lower costs at retail will benefit all customers using cash and plastic,” Mierzwinski told Credit Union Journal yesterday. “Merchants are going to be forced by vigorous competition to pass the savings on to consumers.”
“Merchants have to pass the savings on in order to compete,” he insisted.
All consumers, said Mierzwinski, including cash customers who often are lower income, pay more at the store and more at the pump because of the non-negotiable, non-transparent two cents banks take out of every plastic dollar.
The US PIRG has teamed with a coalition of consumer, civil rights and union groups to lobby for the debit amendment, passed as part of last year’s Wall Street reform bill. They include Public Citizen, Americans for Financial Reform, AFL-CIO, the SEIU union, the Hispanic Institute, the Leadership Conference on Civil Rights,
The proposal will lower fees earned by credit unions and banks on all debit cards to as low as seven cents per transactions, costing credit unions and banks billions of dollars of the estimated $20 billion a year they earn in debit fees.
The Federal Reserve is expected to issue a final rule on the debit amendment any day. Meantime, credit unions and banks are lobbying for a bill that would delay implementation and study the issue for as long as 15 months.
