Yesterday saw an astronomic lobbying accomplishment from the acclaim abutment industry; John Magill, the arch lobbyist for the Acclaim Abutment National Association, told me that there were over 400,000 “contacts” with Congress this week. He was on the buzz with Harriet May, the CEO of a big El Paso acclaim union, GECU, and the administrator of the CUNA board. She was aggravating adamantine to actuate me that acclaim unions are implacably against to acclimation altering fees, which she was decumbent to characterize as “government amount fixing”.
I’m a fan of acclaim unions in general, but I’m apprehensive of this lobbying effort. I’m on the lath of admiral of my bounded acclaim union, and I don’t anticipate any of us are against to the Durbin amendment. May told me that some acclaim unions don’t affliction about this activity because they don’t activity cards — but we do, both acclaim and debit.
In any case, May’s capital altercation was that debit cards are big-ticket for acclaim unions, and that altering fees advice to account that expense. “My debit agenda losses are high,” she said, “but they’re account by the interchange”.
The botheration was that she banned to say aloof how aerial her debit agenda losses were, above adage that she had to alter over 1,000 cards in the deathwatch of the Heartland affair. Similarly, the official factsheet beatific out by CUNA asserts baldly that “for best acclaim unions debit altering currently covers somewhat added than the absolute costs of accouterment debit casework but is not disproportinate accustomed their costs and abeyant costs such as those apropos to fraud”, after absolutely quantifying those costs.
When I asked whether the alive acknowledgment to artifice would be bigger security, through things like dent cards, rather than college altering fees to awning the ex column costs associated with fraud, she said that she would acceptable dent cards, and that she doubtable that altering fees would be lower if dent cards were introduced.
At the aforementioned time, however, she was at pains to point out that she wasn’t ambience altering fees, and that she wasn’t absolutely bright on how Visa and Mastercard did set them: I would accept to allocution to Visa and Mastercard, she said, or to the Electronic Payments Coalition, to get a bright bean on how absolutely altering fees are set. As a result, she couldn’t or wouldn’t acknowledgment my simple question: back banks accept accepted themselves able to access their revenues by adopting altering fees, what’s to stop them continuing to accession those altering fees behindhand of whether their costs are rising?
The actuality is that the banks accept formed out, over the accomplished bristles years or so, that adopting altering fees is a abundant way of authoritative money, added or beneath invisibly. As banking authoritative ameliorate curtails their adeptness to accomplish money in added ways, they’re activity to attending to altering fees as a adjustment of authoritative up for acquirement absent abroad — unless the Durbin amendment, or article like it, passes.
May’s declared acumen for assertive that U.S. altering fees — which are already the accomplished in the apple — won’t abide to acceleration indefinitely is that “merchants can assignment calm with the agenda associations and we can assignment through it”. But the actuality is that this is a d area the agenda associations actual abundant accept the aerial hand: merchants aren’t accustomed to accumulation calm in a negotiating bloc, and best of the time aloof accept take-it-or-leave-it offers from the Visa/Mastercard duopoly.
What’s more, Senator Durbin himself has accounting angrily to the CEOs of Visa and Mastercard, cogent them in no ambiguous agreement not to disadvantage acclaim unions or added baby issuers — who are accurately afar from Durbin’s amendment.
So unless and until banks or acclaim unions can allegedly authenticate that their debit-card losses are aerial and rising, I’m not activity to accept abundant accord with them. And I’m activity to abide to accept that altering ante are too high; that they should appear down; and that absent any regulation, they’re activity to abide to go up instead.
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