Holder urged to investigate debit card fees
WASHINGTON (Legal Newsline) - Members of the House on Thursday called on U.S. Attorney General Eric Holder to investigate whether big banks are coordinating their fee strategies in violation of federal antitrust laws.
The lawmakers say the move is in response to the widespread outrage over new debit card fees charged by Bank of America and other big banks.
Last month, Bank of America announced plans to charge customers using debit cards a $5 monthly fee starting next year.
Two other banks, JPMorgan Chase and Wells Fargo, also recently announced they will begin charging new debit card fees.
The banks are looking for ways to increase revenue after regulations, put in place after the financial crisis, have limited the use of fees.
In a letter to Holder, U.S. Rep. Peter Welch, D-Vt., and four other House members point to public statements made by some banks and banking associations.
The statements, they say, raise questions about whether some price increases that have occurred this year "have actually been coordinated."
"It appears that banks are seeking to justify fee increases after Congress and the Federal Reserve Board recently limited banks' ability to collude with networks to set debit interchange fees," Welch wrote, along with Reps. John Conyers, D-Mich.; Raul Grijalva, D-Ariz.; Keith Ellison, D-Minn.; and Mike Honda, D-Calif.
In one instance, Welch says, the Texas Bankers Association sent an email to members immediately following the failure in the U.S. Senate of a measure to delay debit card swipe fee reforms.
The e-mail read, in part: "Now, the industry must regroup and each and every one of you must decide how you are going to pay for the use of debit cards. It may be through a monthly fee; it may be by using a 'prepaid' card as opposed to a debit card; it may be that there is a way to not offer retailers instant credit for the transactions, limiting the amounts that can be charged, etc..."
Welch and the other House members say such activity "is harmful to competition, raises serious legal questions, and has led to consumers and merchants in the United States earning the dubious honor of paying the highest credit card swipe fees in the world."
"American businesses of every size have seen swipe fees rise faster than any other expense in the last decade -- growing faster even than health care costs," the lawmakers wrote.
Welch is the House leader on the issue of swipe fees and has worked closely with Sen. Dick Durbin, D-Ill., to pass into law key debit card swipe fee reforms.
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