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NATIONAL REPORT -- Legislators in at least two states are taking action to reverse the latest trend of consumer debit card fees. The fees, which can reach as much as $5 a month as in the case of Bank of America, are hitting customers at a time when banks are trying to recoup lost revenue from the recently enacted swipe fee reform.
U.S. Rep. David Cicilline (D-R.I.) is proposing legislation that would ban banks from assessing such fees. H.R. 3190 would prohibit an insured depository institution from charging consumers for receiving or using a debit card.
"After Wall Street greed drove our financial system to the brink of collapse, the big banks received a massive taxpayer-funded bailout to stay afloat," Cicilline said in a release. "It is unconscionable that now, these same banks are trying to reach into the pockets of hardworking American families in order to inflate revenues, bolster balance sheets and feed corporate excess."
In Florida, one elected official is proposing similar legislation on the state level. State Rep. Jeff Clemens (D-District 89) is co-sponsoring HB 375, which would prohibit certain financial institutions from charging specified fees for use or holding of a debit card by a consumer. The bill, if approved, would go into effect July 1, 2012.
"It is unlawful for any financial institutions, including any federal financial institution or state financial institution to charge or impose a dormancy fee, an inactivity fee or charge, or a service fee with respect to the use or holding of a debit card by a consumer," the proposed bill states.
Any violations would be subject to administrative fines and penalties.
Both bills come on the heels of the Consumer Debit Card Protection Act that was proposed on the federal level by Reps. Jason Chaffetz (R-Utah) and Bill Owens (D-N.Y.) on Oct. 12. The bill, in part, would repeal the recently enacted rule capping debit card transaction fees at 21 cents, as CSNews Online previously reported.
In interviews this week with various news outlets, however, U.S. Treasury Secretary Neal Wolin contended that caps on debit card transaction fees -- also known as swipe or interchange fees -- do not hurt the economy. "There is no evidence" the rules have "any real effect on the macro-economy," Wolin said. "It is one provision among many."