Classic conservative bait and switch

Classic conservative bait and switch

via Open Left - Front Page by Mike Lux on 6/4/10

I wrote this morning about how credit card companies get to charge exhorbitant fees- $48 billion worth- every time you use your credit card. Ever see those signs at, say, a coffeehouse- "Minimum $5 purchase to use your credit card"? That's because the credit card companies get to charge whatever they want at the point of sale. I am working with the Retail Industry Leaders Association and Americans for Financial Reform to get an amendment through conference that would regulate the amount they are allowed to charge. It was included in the Senate bill, but not in the House bill.

Today, it came to my attention that former Bushie press secretary, Dana Perino does a classic conservative bait and switch on the Durbin amendment (on FoxNews.com, of course):

While you were preoccupied with the oil spill, the Middle East crisis, the unemployment rate, and everything else in the news, the Senate has been trying to slip a fast one by you. This time, it has to do with your everyday purchases that you make on your debit cards. The changes may sound technical and innocuous when described by the author of the amendment to the financial industry regulation bill, Sen. Dick Durbin (D-Ill.), but peel back the layers and here's what have we've got:

The amendment would make the Federal Reserve Bank dictate debit card "interchange rates." What does that mean? Well, an interchange fee is money that a retailer's bank pays your bank when you use your credit or debit card at their store.
[...]
Much of what you'll find in the bill creates legitimate consumer protections. Durbin's amendment to the bill, however, would do the opposite. Imagine you're planning your monthly budget -- you can take anywhere from 2 to 6 percent right off the top. Retailers will be allowed to add a special charge to your bill if you decide to use your debit card...and given that option, don't you think they'll do that?

Other consequences: you can kiss that no-fee checking account goodbye. Your rewards program? It probably won't have much value if this amendment remains intact.

Another term for this would be "lying", but I'll go the polite route this time. What the Durbin amendment would actually do is help consumers and pump up to $48 billion back into the economy instead of going to the credit card industry- the same credit card industry that got beat with last year's law restricting some of the worst practices in the industry. It's simply bull that this is at all about interchange fees. It's like she simply made it up. And of course, Perino fails to mention that she is now working at Burson Marsteller, the big PR firm, and that a client of hers is none other than Visa.

I wouldn't normally ask you to go to FoxNews.com, but head on over there and leave a comment. One of the best ones I see is from Colorado:

The fact is that the card duopoly (Visa and MasterCard) is setting prices that advantage the banks and disadvantage merchants and their customers. If interchange were purely business-to-business, then banks would have to negotiate with merchants instead of having their card networks set the fee for them. A free market does not exist when a network sets the price and all of the merchants are forced to accept it.

Absolutely right, and if we can't break up the big banks with this bill, we can break up the monopoly the big credit card companies have on throttling small businesses and consumers with fees.

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