LANSING, Mich., April 9 (UPI) -- A Michigan state bank regulator has sided with banks and credit unions by asking federal officials to reconsider new rules for retail debit card swipe fees.
The U.S. Federal Reserve has proposed slashing fees financial companies can charge retailers for using debit cards -- known as a swipe fee -- from 44 cents per swipe to 12 cents.
Ken Ross, director of the Michigan Office of Financial and Insurance Regulation, wrote the Fed this week, telling Fed Chairman Ben Bernanke, "Any additional earnings pressure on our banks and credit unions … will undoubtedly have a negative effect," the Detroit Free Press reported Saturday.
A lower fee would diminish capital held by banks, and "The net result of lower capital at our institutions is necessarily less lending," Ross said.
Banks and credit unions have been asking the Fed to at least delay when the rule would take effect, ostensibly to allow more time for studies to be completed.
Flagstar Bank Executive Vice President Sandro Dinello said the rule would clearly affect customers. "The days of free checking will be gone," Dinello said.
The debit card rule, scheduled to take effect July 12, is part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
Retailers currently pay $20 billion per year to banks on debit card fees.
