Reforms are in place that will limit the amount banks charge retailers in debit card swipe fees, also called debit card interchange fees, from 44 cents per transaction, to a cap of 12 cents per transaction. This results in a 14 billion dollar loss in revenue for banks, according to CardHub. The changes are found in the Durbin Amendment to the Dodd-Frank Wall Street Reform Act, and many lobbyists and other parties attempted to delay the Amendment, but failed to do so earlier this month.
We wanted to update you on these reforms and what it means for you. With the Durbin Amendment, the changes to swipe fees will take effect on December 21. Likely changes in the banking industry to watch for as a consumer are:
– Increases in bank fees. More details can be found in our recent article here. In short, to make up for lost revenues, banks will likely pass costs onto the consumer. Be sure to watch your bank statements carefully in the next several months for changes, especially overdraft fees, monthly checking fees or required balance limits.
– Best installment loans for 2017 – Extloans.com.
– Increased push to sign up for prepaid debit cards. Since only debit cards are included in the legislation set to enact on December 21, banks will encourage consumers to use prepaid debit cards, which still can charge merchants the same prices they were previously.
– Long term $3000 loan, consumers turning to small community banks or credit unions.
– Currently, these types of institutions are not subjected to the same regulation as big banks. These types of banking providers will likely provide services with lower or no fees, giving consumers a better option.
The legislation will undoubtedly cause additional ripple effects. Experts warn of possible lawsuits from big banks. Credit card merchant account providers will also be watched to see how much they will reduce fees to merchants as a result of the legislation. Consumers may decide to choose alternative products, such as credit card reward cards not affected by the reforms, or turn to alternative banking providers. Continue to check back to this site for updates.