'Swipe' Fee Cap Would Force New Fees, Job Cuts, Bank Group Says

by Mercator Advisory Group 0

As the commentary period on the Durbin Amendment draft rules comes to a close on February 22nd, advocates for community financial institutions are sending a message to Congress that leaves little to the imagination. Job cut threats are perhaps the newest component of what has been commonly referred to as “unintended consequences” of the new financial services regulations progressing through the Washington.

The ICBA joins large banks, electronic-payment networks and credit unions in seeking changes to the rules proposed by the Fed in December. “It’s our sincere hope that this is the catalyst that allows Congress to take the steps necessary to stop this rule,” Jason Kratovil, the ICBA’s vice president of congressional relations, said of the survey results. The Washington-based industry group is among the top contributors to members of Congress, spending more than $4.5 million in 2010 as lawmakers debated the Dodd-Frank financial regulation law, according to the Center for Responsive Politics.

The small financial institution segment is under siege from a variety of the different factors including persistent unemployment and a depressed lending environment. This are groups that have firsthand, the impact of market decisions that did not include them. No wonder they’re skeptical at best that any constituency in a market can be protected, whether that protection is legislated or not.

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