Politicians In Illinois Confirm Credit Card Fees Hurting Businesses
Every business in the United States, small and large alike including restaurants, government agencies and charities, are being charges high fees by banks for all purchases made by customers using their credit or debit cards. This was brought to focus by the two prominent US senators Dick Durbin and Luis Gutierrez at a news conference held on the 13th of June, 2010.
These politicians, speaking from Leona’ restaurant located on West Side said that these fees, which are being charged by banks and other financial institutions that issue credit and debit cards, are proving to be a huge burden on the retailers, especially during times of recession where business hits rock bottom. This can lead to increase in prices and a larger number of people being laid off due to heavy financial liabilities. A lot of business owners also made their presence felt during this conference to show their support towards these politicians who are fighting for their financial relief.
A proposal requesting this amendment to be a part of the Wall Street Reform Bill has been put forth in front of the Congress which would in turn direct it towards the Federal Reserve Board. The board would then liaise with the banks and other institutions to come up with terms and cost that would not only be proportional to the cost of transaction but also be reasonable enough for the businesses.
The current interchangeable fee rate varies from 1% to 2% and also includes a minimum fee per transaction. Voicing their concerns, Gutierrez and Durbin said that with the passage of years, as the number of people using their credit and debit card for purchases increases, the percentage of the fees also trended northward.
The two politicians went on to say that in the year 2008 alone, all banks put together amassed a total of $48 billion in revenue through the fees being charged to the retailers and small business owners.
Gutierrez also mentioned that, in 2009, approximately $1.8 million was paid by the CTA and $7.5 million by the government of Chicago to the banks as fees.
Potash Brothers Market’s owner, Art Potash, mentioned that he found these fees to throw them off balance because, most often than not, the fees are higher than the profits they make.
Different versions of the Wall Street Reform Bill have been passed by the Senate and the US House of representatives. The bills are awaiting word from the Oval house approving them. It is only the one that has been proposed by the Senate that house the current proposal on interchange fees.
Similar Posts:
- Overdraft Fees: Helping Financial Institutions, Hurting Card Holders
- Setting upper limit for credit card interchange fees not a wise choice
- PULSE: Debit Card Use Still at High Level
- Visa And MasterCard On The Receiving End Due To Antitrust Concerns
- Despite Being Exempted Small Banks Protest Fee Limits On Credit Cards
