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Federal judge chides the Fed over debit fees

  • U.S. District Court Judge Richard Leon gives the Federal Reserve one week to decide how much time it will need to rewrite rules on how much merchants can charge retailers for swipe fees on debit cards.
  • The judge didn't show a lot of deference to the central bank, telling officials to cut their vacation short to make it happen.
  • "We're not putting a man on the moon here," notes Leon.
  • An ultimate decision in the case could be appealed, but will have big implications at some point for banks and payments companies (V, MA) - as well as swipe-heavy retailers (SBUX, TGT, BBY).
Comments (9)
  • ChuckXX
    , contributor
    Comments (1014) | Send Message
     
    Sounds to me like this Judge has a really large ego. "Not putting a man on the moon here". He sounds like a real "wise a__" as well.
    15 Aug 2013, 09:40 AM Reply Like
  • stoj
    , contributor
    Comments (268) | Send Message
     
    it's complicated beyond belief, and subject to unending revisions, and blowbacks, with the moon program you could calculate most things, when it comes to gov intervention and caps, it can never be calculated fully
    15 Aug 2013, 10:20 AM Reply Like
  • Jon E.
    , contributor
    Comments (3) | Send Message
     
    Visa doesn't benefit from transaction fees. They are charged by the banks. And, this fee only applies to debit card transactions, which are a small part of Visa's total transactions. Visa is a conduit, lends their name to the bank's card, and handles billing. With appeals, it will be years before the current debit card fee structure changes. Visa is global, and most of the world (China, India, Africa, SE Asia, etc.) is just beginning to use plastic. Cash is dying. Visa has no loan risk, has NO debt, and raises dividends regularly. Let's scare this stock down a few more points and I am going to load up.
    15 Aug 2013, 12:00 PM Reply Like
  • jackooo
    , contributor
    Comments (1486) | Send Message
     
    It's a no brainer. Just do it.
    15 Aug 2013, 01:22 PM Reply Like
  • civ-e
    , contributor
    Comments (316) | Send Message
     
    why is the federal reserve involved in regulating a transaction between a bank-visa-customer?
    16 Aug 2013, 02:41 PM Reply Like
  • bestforecast
    , contributor
    Comments (79) | Send Message
     
    because it affects the entire consumer business cycle, i.e. the Feds flow of money.. The banks are but one player in the chess game of business.. The Fed needs the consumers to be able to spend money to keep this game going, any resistance to this will affect the " free flow" of money and hence ruin the idea of capitalism and spending. I think if we continue to regulate business fees, we will be leaving the idea of capitalism towards that of socialism. IMHO.
    21 Aug 2013, 09:58 PM Reply Like
  • civ-e
    , contributor
    Comments (316) | Send Message
     
    it seems like a over-reaching regulation, in particular when using a debit card is not usually necessary and done completely voluntarily, with many alternatives. and there are many credit card networks available to merchants and customers, so it's not like any single one can arbitrarily try to raise the fee and not lose business.
    22 Aug 2013, 02:40 PM Reply Like
  • bestforecast
    , contributor
    Comments (79) | Send Message
     
    If you ask me its stupid.., but the judge is viewing this from the angle of the business owner not necessarily the consumer. The business owners profits are being crimped by the card fees and I imagine the card reader rented from the card company maker. Consumers have gotten so used to using plastic, debit or credit thereby creating an "unfair" advantage to the business owner who has to take the card or risk losing sales. Sort of a consumer driven monopoly. I don't like it when the government starts regulating businesses. its ludicrous, because its the choice of the consumer. Now I do agree with the business owner in allowing them to charge the card fee to the consumer if they want to. At that point it will become the consumers choice. This I think would be a better outcome for both and lessen government interference. And the card company can continue to do what it does best. What do you guys think? I am long MA, and perhaps V, if they can ever get their act together.
    23 Aug 2013, 09:11 PM Reply Like
  • civ-e
    , contributor
    Comments (316) | Send Message
     
    it seems like there is a self-balancing market mechanism that should be allowed to take place without outside regulation: if participating in credit cards costs too much for the business and they decide to stop accepting cards, they can now lower their prices by the X% that the cards were costing them, making them attractive to the customer.
    23 Aug 2013, 09:42 PM Reply Like
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