Another Prediction that Regulation Will Hurt Consumers Proves Wrong

So says Time in Why Banks Love Debit Cards Again.  The report begins as follows:

Debit cards were supposed to be toast. The industry started writing their
obituary when financial reform targeted overdraft fees and interchange or
“swipe” fees, which had made debit cards extremely lucrative for banks. So why
is it that banks are now pushing debit cards like never before?

A couple years ago, the banking industry warned federal regulators that
reform efforts could lead to both an increase in fees and a decrease in debit
card usage. “Banks and credit unions could charge for various debit card‐related
products and services that are now offered free of charge, such as free debit
cards and free debit card transactions,” a consortium of financial industry
executives wrote in a 2011 letter to the Federal Reserve arguing against reform. “Issuers
could also be forced to discourage the use of debit cards for certain
transactions … there could also be a reduction or termination of various
products and services associated with debit card programs.”

As it turned out, none of that really happened. After an initial
retrenchment, banks now are marketing debit cards as aggressively as ever.
They’re even adding back debit card rewards programs, which many had
discontinued in anticipation of the hit the regulations would deliver to their
bottom lines.

0 thoughts on “Another Prediction that Regulation Will Hurt Consumers Proves Wrong

  1. Ted says:

    I’m glad you think so. Maybe you’d be kind enough to provide me the $250+/year the new regulations of credit card and banking fees have hurt this consumer.

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