Higher checking account fees that consumers might be seeing cannot be blamed on higher interchange rates that larger asset banks are paying for their debit cards, according to a study prepared and released by the Merchants Payments Coalition, an organization of retailers created to oppose card interchange.
Banks and credit unions have charged that lower amounts of interchange income from debit card transactions have forced them to raise checking and other fees to make up the difference.
Retailers succeeded in writing a debit interchange cap, called the Durbin amendment, into federal law for card issuers with more than $10 billion in assets.
But the MPC said a study of data compiled by moneyrates.com and Bankrate.com shows that higher fees at financial institutions have not been because of losses from debit card interchange.
“Swipe fees have tripled over the last decade, but that certainly hasn’t resulted in consumer checking fees getting cut by a similar amount,” said Tom Wenning, general counsel for the National Grocers Association, an MPC member.
Their research showed that interchange and checking account fees have increased in tandem for six years in a row. From 2005 to 2011, checking fees jumped from $11 to $14 a month on average, while revenues from interchange grew from about $30 billion to $60 billion a year, the MPC said.
Further, the MPC said its research of moneyrates.com data found that the largest-asset debit card issuers, those impacted by the Durbin amendment, raised checking account fees by a lower amount, on average, than did community banks.
The MPC reported that its research found that small banks, which were exempt from reform and didn’t have interchange cuts – raised consumer fees by 5.52% in the first half of 2012 – almost a full percentage point more than large banks whose interchange was reduced.
