WASHINGTON — One day after introduction of a bipartisan bill to repeal the new debit interchange cap, supporters of that cap struck back Thursday by calling for an antitrust investigation into whether banks and trade groups are colluding on prices.
"It appears that banks are seeking to justify fee increases after Congress and the Federal Reserve Board recently limited banks' ability to collude with networks to set debit interchange fees," Rep. Peter Welch, D-Vt., wrote in a letter to Attorney General Eric Holder. "Statements made by individual banks and their trade associations raise questions about whether some price increases that have occurred this year have actually been coordinated."
The interchange cap — the result of an amendment by Sen. Dick Durbin, D-Ill., to the Dodd-Frank Act — sets a roughly 26-cent limit on what large banks can charge retailers for a debit transaction. Some large institutions have responded with higher customer fees for debit-card use, most notably a $5 monthly fee at Bank of America Corp. Meanwhile, the bill offered Wednesday by Reps. Jason Chaffetz, R-Utah, and Bill Owens, D-N.Y. would repeal the interchange cap.
But Welch's letter — co-signed by four other House members — cited statements by industry leaders from May and June 2011 as possible signs that the customer fees were coordinated. The statements all included warnings that the costs of an interchange cap would be passed on to customers.
"There is clearly no problem with banks making independent business decisions based upon the landscape as they see it. Antitrust issues are raised, however, if they are attempting to facilitate group decisions on their prices, terms and conditions," Welch wrote.
One prominent opponent of the interchange cap, Richard Hunt, president of the Consumer Bankers Association, dismissed the letter's call for an investigation.
"There are many things one may say about the banking industry. Organized and coordinated would not be on such list," Hunt said in an email.
The letter was also signed by Reps. John Conyers, D-Mich., Raul Grijalva, D-Ariz., Keith Ellison, D-Minn., and Mike Honda, D-Calif.
