If Big Banks Raise Fees, Bank Elsewhere: Rep. Frank
Should big banks jack up fees, Rep. Barney Frank, (D-Mass.), told CNBC Friday, he would urge bank customers to shop around and find community banks and credit unions that offer services for free.
“America has one of the most competitive banking systems, if not the most competitive banking system, in the world,” said Frank, who is a ranking member of the House Financial Services Committee and a co-author of the Dodd-Frank Act, a sweeping piece of reform legislation passed last year and aimed at preventing a financial meltdown similar to what happened in 2008.
Frank was responding to a question about the Durbin Amendment. The legislation proposes applying regulation to debit-card payments, and it would cost banks fees.
Specifically, the amendment directs the Federal Reserve to lower the hidden “swipe fees” that banks get from retailers each time a customer buys something with a debit card.
Bankers at large institutions have complained vociferously about the change, claiming it will cost the banking sector an estimated $12 billion in lost fees. To recoup losses, bankers have said, they will be forced to raise fees and pass them on to customers.
Meanwhile, merchants who have said that the card fees bite into their profits are elated.
The congressman also said the outcry from bankers about the Durbin Amendment has created a “disjunction,” when considering how well some large financial institutions are doing.
“They’re [the banks are] paying dividends,” said Frank, “they are paying large compensation.”