Florida Debit Card Bill Would Prohibit Fees

October 18, 2011

Banks would be prohibited from charging customers monthly fees for debit card use under a measure filed in the state Legislature Monday. The proposal would also prevent consumers from being charged for not using their cards.

The bill (HB 375) would definitely affect nearly two-thirds of Florida banks, those regulated by the state. Whether it would affect the remainder, including some of the big national banks that customers are mad at, is in dispute. The banking industry says those federally regulated banks wouldn’t be covered, but the bill sponsor argues that a 2009 Supreme Court decision opens the door for the state to put limits on those banks as well.

The bill is sponsored by Rep. Jeff Clemens, D-Lake Worth, who said banks are trying to recoup losses accrued elsewhere.

“The banks sold us all on the idea of a cashless society, and now that we’ve bought into their promise of free, easy access to our own money, they want to charge us for it,” Clemens said. “Anyone with a sense of decency should be outraged.”

Last month, Bank of America announced it would begin charging customers $5 a month for debit card use, joining SunTrust and Regions banks, which already impose such fees.

Bankers argue that the state can’t regulate federally regulated institutions, and so BOA wouldn’t be covered by the prohibition anyway, said Anthony DiMarco, a lobbyist for the Florida Banking Association.

But Clemens disagrees, citing the 2009 U.S. Supreme Court decision in Cuomo v. Clearing House Association, a case out of New York, in which the court by a 5-4 ruling decided that a federal banking regulation did not preempt the ability of states to enforce their own fair-lending laws.

“To me it’s clear that the Cuomo case allows states to be able to not only regulate local banks but also federal banks,” Clemens said.

Banking industry officials oppose the measure either way, saying such fees are needed to recoup costs and make up for federal legislation passed in 2010 limiting their ability to charge retailers for swiping their debit cards.

“Generally, we are opposed to anything that restricts our ability to determine fees,” DiMarco said.

The federal law limits the amount of money banks can charge merchants when customers use a debit card. Banks say the federal law will cost them an estimated $6.6 billion per year in revenue. Rather than recoup their costs by boosting fees to retailers, banks are turning to consumers to pay the bill.

An industry survey conducted by Bankrate.com in August found ATM charges at their highest rates for the seventh straight year. The higher fees coincide with a decline in free checking accounts and higher penalties for non-sufficient funds.

Clemens’ measure is one of a number of bills affecting banking fees and consumer credit as the market adjusts to federal legislation, a sluggish economy, and cash strapped businesses.

Earlier this month, Sen. Mike Bennett, R-Bradenton, filed a measure (SB 438) that would raise the maximum allowed interest rates on some loans of less than $25,000. An identical measure (HB 275) was filed by Rep. Rachel Burgin, R-Riverview.

The consumer credit bill has come under fire from consumer groups that say now is not the time to raise the portion of loans that can be subjected to higher interest rates. “There is nothing in this bill that is good for consumers,” said Brad Ashwell, the legislative advocate for Florida Public Interest Research Group.

By Michael Peltier
The News Service of Florida

Comments

6 Responses to “Florida Debit Card Bill Would Prohibit Fees”

  1. 429SCJ on October 21st, 2011 4:27 pm

    Jane these serpents own the game. I asked my Father once how much gold, would it take to satisfy these beings,he replied son the devil is never satisfied, he wants it all. I pity those people spending more than they earn, drowning in usury.

  2. Jane on October 18th, 2011 4:16 pm

    There’s a very simple answer to the problem: use a different bank. Most credit unions don’t charge for checking or debit cards. If enough people do this banks will be forced to stop charging fees because they won’t have customers otherwise!

  3. Some who understands on October 18th, 2011 9:24 am

    “If large retailers (the big W mainly) do not want to pay for the convenience of their customers using a Visa debit card they need to only accept their store credit card. Instead they lobbied the Legislators and cried foul not wanting to pay for a service that the banks have invested millions to provide as a convenience for their customers. It’s like me creating a service that the big retailers REALLY want, but don’t want to pay for so they get the Government involved and make it appear that I am price gouging them.”

    Finally, someone who gets it. This has nothing to do with banks. Banks had to charge retailers a fee in order to cover cost for things such as producing cards and 100% fraud protection. Take those fees away and now banks are losing money by providing their bankers a debit card. Walmart comes away scott free with no blame. Tell me something, has walmart’s prices dropped now that the swipe fee has been capped? If Walmart did this in order to lower prices, why was someone who paid cash for an item charged the same as someone who used a card? These large retailers have screwed the banks as well as the general public.

  4. 429SCJ on October 18th, 2011 7:53 am

    6.6 billion in service fees alone. Its is no wonder Christ drove them from the temple. They certainly have their fathers greed, as accused. I guess some things are just in the DNA.

  5. Tired of politics on October 18th, 2011 6:37 am

    If large retailers (the big W mainly) do not want to pay for the convenience of their customers using a Visa debit card they need to only accept their store credit card. Instead they lobbied the Legislators and cried foul not wanting to pay for a service that the banks have invested millions to provide as a convenience for their customers. It’s like me creating a service that the big retailers REALLY want, but don’t want to pay for so they get the Government involved and make it appear that I am price gouging them.

  6. BOGIAN on October 18th, 2011 5:56 am

    This is a nice move to get chumps to vote for you Rep. Clemens. Unfortunately, banks will just get it somewhere else. Had it not been for meddling by the Feds, banks wouldn’t be charging these fees.

    How would you like it if the government busted into your business and told you that one of your biggest money makers was illegal? You’d pout about it for a little while, then find a way to make the money somewhere else. For banks, their go-to tactic is to create new fees or raise existing ones.

Written by William Reynolds · Filed Under News