Federal reserve makes new rules for debit cards - WBRC FOX6 News - Birmingham, AL

Federal reserve makes new rules for debit cards

BIRMINGHAM, AL (WBRC) -

The federal reserve is set to implement new rules for debit cards later this summer. The new rules would lower the transaction cost of debit cards from 44 cents to 12 cents per transaction.  A lot of folks use their debit cards.

"Now a days, I don't hardly go to the bank any more. Just swipe the card, get cash back. It would be a big time inconvenience,"  Thomas Simpson said.

A number of debit card users are already complaining about plans by the banks to limit their debit cards to a $100 to $50 purchas if the new rules go into effect.

"No, it's your money. People have debit accounts. People should have access to it," Greg Cox said.

Stewart Welch of the Welch Group is a financial planner. Welch says this is part of an ongoing fight between retailers and banks. Still, the financial planner has concerns about the federal government stepping into the disagreement.

"Anytime the federal courts gets involved there is is a cost. You got to stop and see who will have to pay. In this case it's the banks. They have the risk, 12 billion dollars in revenue," Welch said.

Welch says some banks such as Wells Fargo have stopped accepting new customers into their rewards program because of the lower rates. Some card holders say they don't want to be forced into using their credit cards with higher interest rates or writing checks with costs assigned to each check.

"I'd be a little bit troubled by the fact they would put restraints on how much we can pull off the debit cards," Aubrey Miller said.

Some in Congress are pushing legislation to stop the implementation of the new rules but it remains to be seen if this will happen.

"Merchants like the concept. Banks hate the concept and the person who is going to pay the price are the consumers," Welch said.

The Public Citizen and the Consumer Federation of America oppose the delay, saying it would be unfair to pass higher debit fees on to the consumers.

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