BofA Rattles a Hornets' Nest: Print Preview
The issue of revenue that banks and credit unions make from transactions on their debit cards moved from the obscure corners of the financial services industry into the national spotlight last week as the Federal Reserve's debit interchange cap came into effect.
The cap, which reduced debit card interchange for large card issuers from an average of 44 cents per transaction to an average of 24 cents, became operational Oct. 1.
"These savings are just the tip of the iceberg," said Bob Baldwin, president at Heartland. "Durbin dollars should stay where they belong–in merchants' bank accounts–and Heartland is helping business owners keep more of their hard-earned cash. Merchants shouldn't take this for granted. They need to be vigilant in ensuring they receive the cost savings they deserve so they don't unknowingly fall victim to processors looking to profit at their expense."
For his part, Sen. Richard Durbin (D-Ill.) fought back against his critics, taking to the Senate floor to denounce Bank of America and other larger banks for imposing the fees. In particular, Durbin alleged that far from taking a loss from the interchange cap, the $5 fee will let the bank make money.