House Democrats have asked the Justice Department to investigate
possible collusion among banks on debit card fees.
Bank of America, SunTrust, JPMorgan Chase and Wells Fargo have all recently announced new debit card fees. The banks cite a need to raise revenue to make up for diminished profits coming from merchant swipe fees as a result of recently passed reform legislation.
The Democrats, Reps. Pete Welch (Vt.), Keith Ellison (Minn.), Raul Grijalva (Ariz.) and John Conyers (Mich.), said in a letter to Attorney General Eric Holder that the timing of the fee hikes raises enough suspicion to warrant an investigation.
It is entirely legal for banks to coordinate their lobbying and political activity, as they did to combat swipe fee reform. As part of that lobbying fight, banks regularly warned that if the fee they were allowed to charge merchants for accepting customers' debit cards was reduced, the banks would raise debit card fees in other ways. That, too, is well within banks' lobbying rights. But coordinating the fee hikes themselves could earn them a seat under a DOJ lamp.
The move by the banks is a rather petty response to their failure, so far, to prevail on the swipe fee, a modest adjustment included in Dodd-Frank to cap the amount that banks can charge merchants when customers use debit cards. The action might have been petty on the part of banks, but the results for consumers most certainly are not.
In addition to this investigation request from House Democrats, Rep. Brad Miller has introduced legislation to make it easier for consumers to move their money out of the banks that are gouging them with debit fees.
This places House Democrats firmly on the side of the 99 percent.