U.S. Sen. Bob Corker of Chattanooga has rightly criticized a financial regulatory law that first threatened consumers with new debit card fees and now threatens them with a range of other new bank fees.
The Durbin amendment to the Dodd-Frank law slashed the amount that banks may charge retailers when customers use debit cards. That price control threatened banks with billions of dollars in losses.
To make up for those losses, banks imposed monthly debit card fees, Corker noted in a recent column in Politico. Many banks have now pulled back on those fees in the face of public anger. But they are still seeking ways to cover their losses, including possible new fees.
"[T]he era of free checking may be coming to an end" as a result of the Durbin amendment, Corker noted.
Plus, retailers that benefit from paying banks lower fees when customers use their debit cards have no obligation to pass the savings along to their customers.
"I wouldn't waste time looking for those [savings]," Corker wrote in Politico. "Prices paid by consumers are unlikely to drop 1 cent. Interchange revenue will just go to the big box retailers' bottom lines -- while consumers foot the bill."
The senator correctly pointed out that Congress should not be picking industry winners and losers.
When it does so, he noted, "the American people are left paying the price -- literally."