Geithner: We will 'prevail' over banks

@CNNMoney October 4, 2011: 7:15 PM ET

NEW YORK (CNNMoney) -- Treasury Secretary Tim Geithner on Tuesday joined a chorus of Democratic officials hitting back at bank fees, saying the administration "will prevail" in the battle over banking reforms.

"There are no surprises, nothing strange about the fact that banks are resisting it -- are pushing back," Geithner told CNN's Erin Burnett. "They are trying to weaken those reforms."

Last year, lawmakers approved a law that limits how much banks can charge on debit card transactions -- a law that led Bank of America (BAC, Fortune 500) to recently switch to a $5 monthly charge.

Geithner said that banks are blaming the government for everything -- including problems they helped create. But the administration won't back down.

"We are going to push back harder," he said. "And in the end, we are going to prevail because what we are doing is a reasonable, sensible thing."

The so-called Durbin Amendment, part of a larger Wall Street reform law, limits banks to charging 21 cents for each debit card transaction. Previously the banks would charge an average of 44 cents, mostly to retailers.

Earlier on Tuesday, Sen. Dick Durbin, citing numbers from the Federal Reserve, said debit card swipes cost the banks between just 4 and 12 cents -- far below even the new 21 cent cap.

Durbin said consumers should consider switching banks as a result.

"If Bank of America wants to nail their customers with a monthly fee, I want their customers to make the conscious decision to go elsewhere where they are better treated," he said.

America's most loyal bank customers

The 21 cent cap is expected to cost the banking industry $5 billion a year, and other banks are considering moves similar to Bank of America's.

Last month, Wells Fargo (WFC, Fortune 500) said it will test a $3 monthly fee in Georgia, New Mexico, Nevada, Oregon and Washington for customers who use their debit card for purchases. That test begins Oct. 14.

At the end of last year, JPMorgan Chase (JPM, Fortune 500) announced a similar test, in which it charged customers in northern Wisconsin a $3 fee for using their debit cards.  To top of page

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