If there's a more loathsome DC politician than Dick Durbin, I can't think of....wait, Barney Frank, Chuck Shumer, Nancy Pelosi, Harry Reid, Keith Ellison....whatever, he's pretty awful.
Tricky Dick forced onto the Frank/Dodd banking bill a little known bill which as of Oct1 prevented banks from collecting fees from retailers for their customers using that banks debit card. Any high-school economics student could tell you that when you restrict prices on one place, they always go up somewhere else. This time, the customers are paying the banks directly for using a debit card rather than the retailer, punishing the customer rather than the bank, accomplishing the precise opposite of Durbin's intent. Circumventing the marketplace, as Jimmy Carter learned in the 70's, only makes things worse.
Some have said that Durbin is just plain stupid for not foreseeing this, but I think it's more sinister than that. I think he knew this would happen and by forcing banks to stick customers directly with the fee, democrats could use this as an issue to make Americans hate big banking even more than we do already. If Americans are mad enough at banks, the democrats assume, we'll support their virtual takeover through executive fiat and regulations of the banking industry entirely.
I'm not saying Durbin isn't an idiot, he is. But I think he did this with knowledge of what would happen.
2 comments:
Bank of America should call this the "Durbin Fee" when they institute it - if they have the guts.
Thank you for the article, very useful piece of writing.
Post a Comment