Friday, December 17, 2010

What is good for consumers?

The Fed has proposed new fees that card companies can charge retailers for swiping. Every time you swipe your card at the gas station or grocery store or Target, the companies that help in that process (Visa, Mastercard, etc) charge the retailer a fee. Currently, the fee is 44 cents. The new Fed proposal caps that fee at 12 cents. That seems like a good thing, right? Only for consumers. In an article in the Wall Street Journal, Ed Yingling, president and chief executive of the American Bankers Association, said in a statement that the rules "essentially relieve retailers of paying their fair share for a card payments system that offers them tremendous benefits." He added that the Fed's proposal was a "bad deal for consumers."

Uh, no sir. It's a bad deal for your banks, but it's good for us. The banks need to STFU.

Oh, and I'm reading 'Aftershock' by Robert B. Reich. You should, too.