For far too long Big Banks and Credit Card companies have been allowed – without fear of reprisal – to gouge Ma and Pa retailers, other small businesses and the American consumer. Despite a history of members of Congress snuggling up to Wall Street bankers, even lawmakers decided last year that enough was enough.
Congress passed, and President Obama signed, legislation designed to level the playing field and put a halt to the greedy bankers when it comes to the $20 billion debit and prepaid credit card industry. Bottom line the new law stated emphatically that Big Banks couldn’t charge whatever they chose in transaction fees and instead they would be limited to a maximum 12-cents-per-purchase. That still allows banks to amass huge profits when you consider the actual cost for over 37 billion such transactions annually is about 4 cents apiece.
Did the money-grubbers on Wall Street accept the outcome of Congressional action graciously? Hardly. The ink on the president’s signature was barely dry when the Big Banks began to assemble an army of well-heeled lobbyists to at least delay, or better yet kill, the reforms.
The lobbying effort it targeting weak-kneed lawmakers who supported the bipartisan swipe fee reforms last year, but who now hope their constituents won’t notice if they experience a turnabout and vote against the very reforms they found so enticing just months ago. Lawmakers better understand that they can’t have it both ways and that there will be severe consequences for those who abandon the consumers and small business operators and instead do the bidding of Big Banks as they desperately try to cling to their uncompetitive advantage over community banks and credit unions.
Transaction fees that exist to benefit Big Banks at the expense of others can’t be changed soon enough. It shouldn’t be too much to expect our elected officials to do the right thing and come down on the side of consumers and small merchants to finally adopt a fair and sensible solution to a problem in desperate need of remedy.