Debit Charges and Senate Hucksters

Dodd-Frank Bill
Dodd-Frank Bill

New Orleans The Dodd-Frank Financial Reform Act called for the Federal Reserve to put an end to the debit card surcharge padding when that retailers were paying to banks and credit card companies, usually amounting to 44 cents a transaction.  New Fed proposals would cap the amounts at 7 to 14 cents, about an 80% reduction.  Hooray!

But banks and card issuers are crying like babies at losing this opportunity to scam consumers on the swipe.  Visa lost 10% of its value on the market yesterday.  Bank of America and Wells Fargo record as much as 2.5% of their revenue from this scam, according to the Wall Street Journal.

I love this not only because it is a win for the biscuit cookers, but also given ACORN International’s Remittance Justice Campaign, this is another indication of what at least one authority – the United States Federal Reserve – believes is the actual cost-plus profit of such a transaction.  With enough indirect data, eventually we will understand real costs, not just predatory pricing strategies.

This is also a boost for citizen wealth, if it turns out right:

“A $100 transaction today, for example, means merchants currently pay banks as much as $1.30 in debit interchange fees, according to figures provided by the Nilson Report. Under the proposals, the merchant would pay no more than 12 cents, said David Balto, a fellow with the left-leaning Center for American Progress.”

Hey, let’s have that buck back!

Here’s the head scratcher though, thirteen (13) United States Senators wrote a letter to Fed Chair Bernacke complaining that the card companies and banks were getting stiffed.  I badly want to know who these 13 are, since their names probably comprise something that will be as close as we can come to a list of the Banking and Credit Senators or Anti-Consumer Senators, someone should come up with a better name.  I have to admit to having been foiled even after a half-hour of searching since I was only able to come up with 7 of the 13 names, so anyone who knows speak up:

  • Richard Shelby (R-AL) (Senate Banking Committee)
  • Mark Warner (D-VA) (home state of Capital One!) (Senate Banking)
  • Chris Coons (D-DE) (corporate registry state for many of these companies)
  • Tom Carper (D-DE) (see above)
  • David Vitter (R-LA)  (WTF?)
  • Judd Gregg (R-NH)
  • Evan Bayh (D-IN)  (looking for a goodbye present?)

Save the Children Greenwashing for Corporations

Baby-SodaNew Orleans Something just does not smell right about the protestations from Save the Children that they are dropping out of the point position in the fight to impose higher taxes on soda drinks as part of the campaign against childhood obesity.  The R.J. Johnson Foundation had given them $3 million for their advocacy work in the US, which they were regranting to groups on the ground, but despite their protestations it all seems especially sketchy when one looks at their corporate partnerships and willingness to “greenwash” a lot of outfits that make one wonder what’s going on with Save the Children and their willingness to damage their “brand.”

The Times notes that SCF had received a $5 million donation from Pepsico in 2009 for work in India and Bangladesh before they started on the soda tax thing, which the reporter seemed to let go, but contribution worried me as well.  SCF would have been joining with Pepsi in India at the very time that the fight led by Amit Srivastava and a large coalition of Indian NGOs around the water usage and contamination of Coca Cola and to some degree Pepsi bottling plants in India was at its most fierce, including mass demonstrations around construction , and outright bans in Kerala and other south India states.   On its website SCF touts its work in India “since independence” but Pepsi would have been desperately looking for a BFF in India to clean up its image in this critical market.  Both Pepsi and Coke are huge foreign players in the bottled water market in India as well.  This is big business, and I could not help thinking that SCF had been either voluntarily or unwittingly recruited as a cat’s paw here.

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