Fee Cap Opponents Still Fighting Federal Regulations
By Credit.com Staff
A proposed cap on the amount of money credit networks can charge for processing a debit card transaction has recently drawn heavy fire from a number of major players in the industry, according to a report from the Washington Post. Some also believe that by highlighting just how much it will cost not only big credit companies, but small ones as well, they may be able to prevent the new rules from being implemented.
The Independent Community Bankers of America, which represents smaller lenders, believes the cap does not prevent retailers from encouraging customers to use cheaper cards issued by larger banks, the report said. Other opponents, including the American Bankers Association, say the new caps would be tantamount to price fixing.
Currently, lenders charge between 1 and 5 percent of a purchase price to process debit card transactions, but the new rule would limit that to a flat rate of 12 cents, further cutting into bank profits.
