I understand that it within everyone’s rights and indeed their interests to present their ideas in the most favorable light. Sometimes, however, it is hard not laugh, laughing being emotionally more calming than outrage, at their efforts.
I recently saw a banner advertisement that warned me Congress was going to raise my costs for using payment cards. The implication of this dire warning was that sneaky politicians were going to levy a new tax or fee. My potential outrage turned to the more calming smile when I realized it was banking propaganda.
Congress has proposed legislation that would limit the interchange fees. Interchange fees are the amount paid by the retailer for card processing. Currently these fees can be 2 to 3 percent for credit and 1 to 2 percent for debit transactions. The legislation would lower those fees to 12 cents per transaction.
The banks claim that the only beneficiaries of this harmful rule are retailers, who will take home an additional $14 billion in profits. It almost sounds like the banks really care about you until you realize that it is the $14 billion that concerns them; they are not so much worried that greedy retailers will take $14 billion from your pocket, they are worried that greedy retailers will take $14 billion from their pockets.
I am not sure that retailers would not pass on some of their savings, as retailing is more competitive than banking (or at least customers are more aware of differences in retail prices).
The bankers (actually an outfit called The Electronic Payments Coalition) claim all manner of harm will befall consumers if this were to pass: e.g., account fees, the abolition of reward programs, or the disappearance of cards altogether. Their website attempts to make it sound as if government were going to implement these draconian punishments. It is the banks that are threatening these punishments (I suspect that ultimately they would see 12 cents as better than no cents). Nothing in the legislation tells the banks to do these things, it is just an attempt to bully and threaten consumers.
I am not necessarily arguing in favor of such legislation but discussing the manner in which they present it. Whatever the merits of their case, we should have learned to be careful of the claims of bankers. I am not exempting the Retail Federation from claims of rent-seeking (more plausible as the legislation would change market transactions in a way that benefits them), I just have not seen one of their banner ads.
Perhaps we should all go back to cash. . . or gold.
I have to laugh at that title from a group that received Trillions in government aid. Perhaps the “us” refers not to “we the people” but to “us the bankers.”