Kerpen on FoxNews: Debit card price controls, a lesson in cronyism
Six months ago, the Federal Reserve implemented price controls on debit card swipe fees under the Durbin Amendment, one of the many deeply misguided provisions of Dodd-Frank.
Last summer the U.S. Senate had an opportunity to turn off these price controls, but they failed to do so. With twelve Senate Republicans betraying the free market, the effort failed by six votes.
Proponents of the price controls insisted that the lower transaction fees would be passed on to customers in lower prices at the register, but six months of experience have shown that this experiment in regulatory intrusion has been all pain and no gain for consumers.
As predicted, banks who could no longer earn a market return on debit transactions shifted to charging fees for consumer debit cards, until vilification by politicians and the media forced them to drop the fees.
Then they shifted to more subtle fees, with most banks greatly restricting the availability of free checking accounts with higher minimum balances.
Popular rewards programs are disappearing.