Durbin and Wal-Mart vs. Consumers

If you bank at USAA you have not seen your checking account fee increase—but you still have lost an average of $84 a year from shut down rewards programs. That’s the equivalent of a $7/mo fee.

This is just one of the things that Reason’s James Groth points out in an op-ed published in Minyanville yesterday:

Instituting monthly fees on customers making purchases with debit cards—which would be a straightforward way to fund the provision of debit card services—has resulted in public outcry and a substantial outflow of customer deposit accounts forcing financial institutions to change tact and find other sources of revenue. Banks are planning to charge checking account fees for customers who do not meet minimum balance requirements, or who do not exclusively bank online and use online bill pay.

TD Bank (TD) has already raised fees on a host of services like wire transfers and money orders, and it has also created a $9 fee charging customers for making more than six withdrawals in a billing period. Some banks are exploring eliminating all overdraft and non-sufficient fund fee reimbursements. Banks may also place a $50 or $100 cap on the amount customers can charge per debit transaction.

Despite whether or not these fees are fair business decisions, they are not necessarily the actions of greedy bankers squeezing what they can from their customers. Even USAA, a part co-operative serving primarily America’s U.S. military personnel, veterans, and U.S. military family members, is cancelling programs as a direct result of the Durbin Amendment costing its banking customers an estimated $84 per year.

The Durbin Amendment will cost customers banking with Bank of America, JPMorgan Chase, and Wells Fargo close to $200 per year depending on the mix of fees they choose to adopt.

See the whole commentary here.
Anthony Randazzo

Anthony Randazzo is director of economic research for Reason Foundation, a nonprofit think tank advancing free minds and free markets. His research portfolio is regularly evolving, and he maintains a wide interest in economic policy at both a domestic and international level.

Randazzo is also managing director of the Pension Integrity Project, which provides technical assistance to public sector retirement system stakeholders who are seeking to prevent pension plan insolvency. His research focus on the national public sector pension crisis has a dual focus of identifying the systemic factors that cause public officials to underfund pension obligations as well as studying the processes by which meaningful pension reform can be accomplished. Within the Project he leads the analytics team that develops independent, third party actuarial analysis to stakeholders considering changes to public sector retirement systems.

In addition, Randazzo writes about the moral foundations of economic theory, and is currently developing research on the ways that the moral intuitions of economists influence their substantive findings on topics like income inequality, immigration, or labor policy.

Randazzo's work has been featured in The Wall Street Journal, Forbes, Barron's, Bloomberg View, The Washington Times, The Detroit News, Chicago Sun-Times, Orange-County Register, RealClearMarkets, Reason magazine and various other online and print publications.

During his tenure at Reason he has published substantive research on housing finance, financial services regulation, and various other aspects of economic policy at the federal level. And he has written regularly on labor economics, tax policy, privatization, and Turkish-U.S. political and economic issues.

Randazzo has also testified before numerous state and local legislative bodies on pension policy matters, as well as before the House Financial Services Committee on topics related to housing policy and government-sponsored enterprises.

He holds a multidisciplinary M.A. in behavioral political economy from New York University.

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