Oh Jeez, Here Comes More “Help”

More and more with this “financial-overhaul” business.  The more Congress acts to “protect me” the more I feel exposed.  We have seen some examples here and here of the damage Washington has done to me even as they work to protect me.  As they change the rules on the banks, making it harder for them to adjust to changing realities, those costs are simply passed on to everyone.  I see my costs go up.

I’m afraid they did it again….

From an article in today’s Wall Street Journal we are learning that “swipe fees” will be regulated by the government:

Retailers stand to reap billions from the financial-overhaul legislation being finalized by Congress this week, possibly giving them a long-sought victory by slashing the “swipe fees” that credit-card companies charge merchants for every debit-card transaction.

Members of the House and Senate announced an agreement Monday to include the debit-card fee cuts in the final version of the overhaul bill—a loss for the financial industry, which had mounted a furious campaign to eliminate or water down the proposed regulations.

So, what does this mean for the banks and for the stores we shop at?

Retailers, restaurateurs and gas-station owners have long complained about the so-called interchange fees charged by banks for Visa Inc. and MasterCard Inc. debit cards, which average roughly 1% to 2% of the total transaction amount—far more than similar fees to process paper checks.

Right.  Every time we use a debit card to pay for something, the bank charges a fee, the merchants, to process the transaction.  And the merchants don’t like it.

“Every dollar we pay the credit-card companies is a dollar we can’t pass on to consumers or use to hire employees or build more stores,” said Scott Mason, vice president of government affairs for home-improvement retailer Lowe’s Cos. “Literally you are talking about hundreds of millions of dollars.”

I resonate with both sides, I really do.  The merchants are right, they pass the costs on to us and WE pay the fees.  That, or they are unable to h ire more people.  Again, we pay.  On the other hand, it’s not like the banks don’t pass on costs and don’t hire people too.

What this really is, at the bottom of it, is government picking a winner.  A voluntary business transaction should be able to be negotiated between two parties without government intervention.  Why the Feds think they need to decide which massive lobbying group gets the money is besides me.