WASHINGTON -- The U.S. Department of Justice announced it plans to keep a watchful eye on banks' debit-card fees, a warning that comes at a time when banks are expected to hike fees on checking accounts and other banking services in order to recoup lost revenue, according to a MarketWatch report.
"The Department of Justice is reviewing the statements and actions by banks and their trade associations regarding possible increases in consumer fees for using debit cards," the department wrote in a Nov. 16 letter to Vermont Rep. Peter Welch and other Democratic lawmakers, according to the report. "Please be assured that if it finds that individuals, banks or other parties may have violated the antitrust laws, the department will take appropriate action."
The letter, made public on Tuesday, is a response to a letter the lawmakers sent Attorney General Eric Holder in October, in which they asked him to investigate whether banks are working together on fee hikes in violation of federal antitrust laws. Welch and the other Democrats sent the letter amid consumer concerns' about Bank of America Corp.'s initial plan to charge customers a $5 monthly fee for debit card use. Amid consumer outrage, the bank scrapped the plan.
Still, banks say Washington's moves to regulate the financial industry over the past two years are forcing banks to raise or introduce new fees in order to stay profitable.
In its response to the lawmakers' letter, the Electronic Payments Coalition, a broad group of financial services companies, in October said that Congress' decision to limit debit-card interchange fees has left banks with no other option but to raise fees.
"This was an unprecedented move by government to intervene in a free market, leaving businesses with no choice but to turn to their customers to make up the difference," the coalition said in a recent statement.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.