House Democrats Ask Attorney General to Probe Debit Fees

October 15 00:00 2011

New York, October 15 (RainbowNewsLine.com) – Five House Democrats have asked the Justice Department to probe whether there was any collusion between US banks and their trade groups on decisions to introduce new fees for use of debit cards in response to caps on what they can charge for using them.

Representative Peter Welch, a Vermont Democrat, wrote in a letter sent to Attorney General Eric Holder today, “Statements made by individual banks and their trade associations raise questions about whether some price increases that have occurred this year have actually been coordinated.” The letter was also signed by Representatives John Conyers of Michigan, Raul Grijalva of Arizona, Keith Ellison of Minnesota and Mike Honda of California.

On Oct. 1, the Federal Reserve had restricted the fees that card networks charge to 21 cents per transaction which was about half of what retailers had been paying. Retaliating to this new rule, leading banks including Bank of America (NYSE: BAC) and Wells Fargo (NYSE: WFC) had imposed new charges for debit consumers to make up a part of the $8 billion that the largest banks stand to lose because of the new rules.

The $5 monthly fee for some debit card holders, introduced by some large banks including Bank of America, has been vehemently criticized by customers and policy makers, including President Barrack Obama.

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