WASHINGTON -- "It's time to face the facts that debit reform is good for consumers, small business and the U.S. economy," the Merchants Payments Coalition (MPC) said in a letter urging members of Congress to not "fall prey to bogus arguments [by banks] about the impact of the debit reforms."
Referring to Bank of America and its widely reported new $5 monthly debit-card fee, as well as to the financial industry's opposition to interchange-fee reform, the letter said, "Retailers believe in free markets: markets that are transparent with strong competition. If a bank wants to openly charge its customers to retrieve their own money, the bank is free to do so, but it also needs to accept the consequences if customers express their strong dissatisfaction or take their money elsewhere."
It added, "Swipe fees drive up costs for the nation's largest private-sector employer--the retail industry--and its customers. The retail industry supports 41.6 million U.S. jobs and contributes $2.48 trillion annually to GDP, according to a 2011 PricewaterhouseCoopers study conducted for the National Retail Federation. ... Debit swipe fees have been the fastest-growing cost for retailers over the past decade; a reduction in those fees will have a positive impact on the ability of the retail community to hire new workers."
And it said, "Retail is super-competitive. Take, for example, gasoline retailers who post their prices on the side of the road for everyone to see, or the supermarket industry for which industry trends show that prices remain the prevailing reason for store choice. When retailers as a whole see savings, those savings ultimately get passed along to consumers because retail has transparent and competitive pricing. Any merchant who doesn't pass through those savings along to the customer will lose business to its competitors."
Along with killing debit-card fees and ending rewards programs, banks have cited ending free checking as a way that financial institutions might recoup revenues lost as a result of swipe-fee reform.
In a separate statement, the MPC said, "As bankers and pundits hype the end of free checking, banks across the country are making public announcements of their plans to maintain their free checking programs. One New Jersey credit union is even offering a 'switch kit' to make it easier for people to leave their current bank and switch to one that has free checking."
The group cited Ally Bank and ING Direct; Arvest Bank; Bancorp South; Eastern Bank (which said "Bank of America struck the third rail on this one; we think it will be an opportunity to attract new customers. People are fed up with fees"); First Bank; Hapo Credit Union, Yakima Federal Credit Union and Gesa Credit Union; M&I Bank and BMO Harris Bank; North Jersey Community Bank; Penn State Employees Credit Union; Redwood Credit Union, Exchange Bank, Summit State Bank and Bank of Marin; Renasant Bank; State Farm; Washington Mutual; USAA; and U.S. Bank as financial institutions that have gone on the record to say that have gone on the record to say that they are not planning to follow Bank of America's lead by levying a debit-card fee.
Meanwhile, click here for an ABC News report on customer Molly Katchpole, who delivered a petition with 153,000 signature to Bank of America requesting that it revoke the $5 monthly debit-card fee.
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