Thursday, February 17, 2011

Next Up: The War on Card-Fees

The 'Financial Reform' Act has encountered a problem: the State of Michigan.

And there's more.

...As argued by a lawsuit challenging the Durbin Amendment from Minneapolis-based TCF National Bank, on which Epstein is serving as an attorney, the fee controls likely violate both the Due Process and Takings Clauses of the 5th Amendment because they deprive banks and credit unions that issue cards of their property rights to a return on capital invested. The Supreme Court in its 1989 case Duquesne Light Co v. Barasch, affirmed 8-1 that a government-set "rate is too low if it is so unjust as to destroy the value of the property for all the purposes for which it was acquired."

(The Fed's rules correspond to the Act's terms.)

The banks argue that restrictions on card-fees were inserted at the express request of WallyWorld, Home Despot, and Walgreen's. In fact, the Walgreen CEO called Dickie DuDuDurbin personally to bitch about how much Walgreen's had to pay to banks for card-fees.

So DuDuDurbin fixed that!

Along the way, he smacked the banks, but as one might expect, he smacked the small banks and credit unions even harder (volume, you know.)

HT: AmSpec

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