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Deal Reached On Financial Overhaul Bill - Two Provisions That Will Affect Savers The Most

Friday, June 25, 2010 - 1:29 PM
The conference committee passed the financial reform overhaul this morning. Both the House and Senate are expected to pass the conference report next week. This WSJ article and this CBS news article have a good summary of the major provisions of the bill. Two that will affect savers:

Deposit Insurance: Would permanently increase the federal deposit insurance for banks and credit unions to $250,000, retroactive to January 1, 2008.

Credit/debit Card fees: This provision would regulate the $20 billion interchange fee system
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Ken TuminKen Tumin5,467 posts since
Nov 29, 2009
Rep Points: 124,996
1. Friday, June 25, 2010 - 2:16 PM
This bill will do another thing re credit cards -- something I think is a very bad idea. The law currently bars a surcharge for using a credit card. This bill will eliminate that, allow merchants to charge you extra for use of a credit card. (Yes, I know it has become somewhat common for gas stations to effectively charge to use a credit card. They use a loophole -- the law bars a surcharge, so the gas stations don't call it a "surcharge" but played a word game and instead call it a "cash discount." I don't know of that word game ever being challenged in court. The bill should have closed that loophole, but instead it did the opposite.)

I think that is bad for multiple reasons. For one, it will now be pushing people to carry more and more cash in their pockets -- and that is very bad for security and to avoid crime. We're advancing backwards!

It also will require a lot more trips to the bank to keep getting more and more cash -- a lot of wasted time and that much longer a line at the bank or ATM any time you go there. 

Meanwhile, cash users are NOT going to pay less than they now pay -- that would be naive expectations. What you will see is that credit card users will have to pay more -- meaning a hidden price hike. And you often won't even know that until you are checking out at the cash register!

That is, there will be NO benefit whatsoever from this for the consumer. Just to hold ground where you are now, you will now have to start making a lot of trips to the bank for cash.
11
me1004me1004368 posts since
Jan 16, 2010
Rep Points: 2,559
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