Thursday, March 24, 2011

Bernanke: Community Banks to be Spared of Debit Card Fee Limits

Federal Reserve Chairman Ben Bernanke said yesterday that the central bank will exercise "all the powers that we have" to ensure community banks are effectively spared from debit card fee limits dictated by last year's Dodd-Frank financial-overhaul law, the Wall Street Journal reported today. The Fed's draft rule would prohibit large banks from charging merchants more than 12 cents each time a customer pays with a debit card, down from the current average of 44 cents. The law included an exemption for small banks and credit unions, those with less than $10 billion in assets, but these small institutions say that the exemption will not work in practice and market forces will push them to accept the fee cap setfor large banks. Bernanke said that many community banks are rebounding, but they face substantial challenges due to a weak economy, continued uncertainties in real estate and other key markets, and the changing regulatory environment.

                                     So much for the purpose of the act- helping consumers!!!