Debit card fee plans facing antitrust review

@CNNMoney November 22, 2011: 3:30 PM ET

NEW YORK (CNNMoney) -- The recent attempt by some of the nation's largest banks to impose new fees on debit card use has caught the attention of the Justice Department.

The department, in a letter to Rep. Peter Welch, a Vermont Democrat, says the efforts by banks to impose the fees is under review for possible antitrust violations.

"Please be assured that if it finds that individuals, banks, or other parties may have violated the antitrust laws, the Department will take appropriate action," Assistant Attorney General Ronald Weich wrote in the letter released by Welch's office Tuesday.

According to the letter, Welch contacted Attorney General Eric Holder in October, expressing concern that several banking trade associations and banks -- including Wells Fargo (WFC, Fortune 500) and Bank of America (BAC, Fortune 500) -- might be violating antitrust laws in response to new regulatory legislation.

"Specifically, we are concerned that communications between banks and bank associations that may amount to price signaling or collusion have occurred in the wake of Congressional action to reform debit card swipe fees," Welch wrote in the letter also signed by four other Democratic congressmen.

Bank of America was prominent among the big banks that sought to impose the fees, which varied in cost and scope from bank to bank.

What will the banks try next?

The effort was largely the result of new regulations that were part of 2010's Wall Street reform law that limit the revenue banks get from merchants by charging fees when customers swipe their debit cards. The new rule is expected to cost the banking industry billions of dollars.

But the proposed fees led to an outcry from consumers and lawmakers, and the plans to raise the fees were scrapped.

"While big banks like Bank of America beat a hasty retreat on their debit card fee strategies, I have no doubt that they will continue their quest to dig deeper into the pockets of struggling consumers," Welch said Tuesday in a statement. "As they consider their next move, they should be aware that there is a cop actively on the beat."  To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.80%3.88%
15 yr fixed3.20%3.23%
5/1 ARM3.84%3.88%
30 yr refi3.82%3.93%
15 yr refi3.20%3.23%
Rate data provided
View rates in your area
Find personalized rates:
Economic Calendar
Latest ReportNext Update
Home pricesAug 28
Consumer confidenceAug 28
GDPAug 29
Manufacturing (ISM)Sept 4
JobsSept 7
Inflation (CPI)Sept 14
Retail sales Sept 14
  • -->

    Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.