Here I thought that the rule of law actually mattered, and that when the good guys triumphed (three times — twice in Congress, once in the courts) the battle was over, we could enjoy the moment and brace for the next fight. As I wrote yesterday, “The proposed rule that came out from the Fed a while back was reasonably fair to the retailers, which was a major upset given how kind to Wall Street banks the Fed has historically been.”
Silly me for forgetting about the immeasurable political influence of the big banks:
The Federal Reserve said Wednesday that banks can only charge retailers 21 cents each time they swipe a debit card.
The board raised the cap from its initial proposal of 12 cents per swipe. Banks and big payment processors like Visa and Mastercard convinced the Fed that was too low to cover the cost of handling transactions, maintaining networks and preventing fraud.
Banks currently have no limit and charge an average of 44 cents per swipe.
It’s uncommon for the Fed, or any other government regulators for that matter, to change their rules dramatically during the comment period, but this change is a big deal. It’s simply offensive that the Board of Governors decided to give another handout to the Too Big to Fail financial institutions in this manner.
This ruling also pushed back the implementation deadline to Oct. 1, which is later than expected (And for every month that swipe fee reform is delayed, banks snag an extra $1.35 billion in fees, according to The Nilson Report.)
As I wrote yesterday, the Too Big to Fail banks are so big and so powerful that they win almost every battle and undermine almost every regulation — and it has happened again. Today’s craven sellout to the big boys by the Fed is one more reminder of why we need to break these banks apart so they don’t keep running roughshod over our democracy.