Small banks oppose swipe fee restrictions
The battle between lawmakers and credit card issuers is raging on. Now small banks are voicing their opposition for the proposed amendment.
Experts say that small banks’ opposition of the amendment that would limit swipe fees from card issuers may prevent the provision from becoming law, reports Reuters.
Credit card giants Visa and MasterCard have unfair power to exploit retailers with costly transaction fees. Other countries have much lower swipe fees, says Reuters, partially because regulations are in place.
The proposed amendment does not impact small banks, but there is fear that Visa and MasterCard will impose the same fees as their larger counterparts, says Reuters.
“Legislating a carve-out doesn’t make it so,” said vice president of operations at Chartway Federal Credit Union John Blum, reports Reuters. “We don’t believe (the carve-out) will be necessarily applied” by Visa and MasterCard.”
The proposed amendment made by Illinois Senator Dick Durbin would reduce the profits card companies make from credit card transaction fees. Durbin’s office reports that $48 billion was paid in swipe fees in 2008.